hi i've started residency and am earning a living. but the fact is i haven't worked in like 6 years and so am not too familar with the w4 tax forms. I want to take home the maximum amount of money each week. so should i claim the maximum amount of dependants i'm elgible for (which is like 5) or the minimum which is 0. also how big of difference is it in take home pay between the two extremes on a typical 40k resident salary. thanks alot for your replies.
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does claiming more dependants on W-4 form increase or decrease your take home pay?
Started by godfather
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I don't know how big of a difference it is off hand but you should claim 5. The more dependents, the more tax deductions you'll get. You will owe a big chunk of change come April next year though.
BE CAREFUL. If you owe TOO much you could end up paying the IRS a **penalty** in addition to tax owed - for not deducting enough throughout the year.
Your personnel office should have a worksheet that helps you figure out how many deductions to take.
Your personnel office should have a worksheet that helps you figure out how many deductions to take.
You can theoretically claim as many dependants as you want (within reason). The downside is that if you claim too many, you will be penalized with a penalty fee. The W-4 has a worksheet designed to calculate exactly how many dependants you should claim.
If the worksheet indeed indicates 5, than certainly claim that number. Without knowing your specific salary and information, I cant tell you what the exact difference would be. I can tell you that claiming less than five will be granting the hated IRS an interest free loan from a startving resident. That would be foolish. Claim the maximum allowed.
If the worksheet indeed indicates 5, than certainly claim that number. Without knowing your specific salary and information, I cant tell you what the exact difference would be. I can tell you that claiming less than five will be granting the hated IRS an interest free loan from a startving resident. That would be foolish. Claim the maximum allowed.
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Stinky T
I think putting 7 as a single guy would be about right. Remember, you will only be working part of the year in 2002 so you will be in an even lower tax bracket. You can owe the IRS up to $1000 before you are charged interest (~7%) and assessed a penalty (minimal). You definitely do not want to give the government an interest free loan; therefore, owing them money (less than $1000) is always better than getting a refund.
