W4 exemptions?

[DisMN]

Is there a rule of thumb as to how much $ an exemption is worth on your W4 form? The higher you go the more you get back each pay period correct? (yes, I know this has to be paid back)

 

[AKBAFB]

There's not a single dollar amount that an exemption is worth, but rather a table based on your income and the number of exemptions you claim that determine the dollar amount withheld from your paycheck. You should be able to find the tables online at the IRS.

 

[AKBAFB]

And, yes, the more exemptions you claim, the less they withhold from your paycheck, so you'll have a bigger paycheck now, but the possibility of having to pay in when you file your taxes if you weren't withholding enough.

 

[RitaE]

well usually the higher the number, the less that is withheld per paycheck, down to $0 withheld of Federal Income Tax.

The only thing you can "get back" on your paycheck that I'm aware of is the Earned Income Credit.

 

[dejr_8]

Word of caution:

You have to have paid a certain percentage of your Fed Income Tax by end of Q3 or else you pay a penalty. I believe you have to pay 90% of your estimated taxes by end of Q3 or atleast an amount equal to last year's tax burden.

For example: If you owe $10,000 in federal taxes for the entire year of 2008, you will need to have paid 90% x 75% x $10,000 by end of Q3 2008. The Feds don't like you to wait until the end of the year to pay your taxes - they want their money throughout the year.