| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 453.1 | | SDSVAX::SWEENEY | Patrick Sweeney in New York | Fri Apr 16 1993 10:37 | 8 |
| If your refund is very large, then you ought to claim more deductions.
If you can handle the cash flow of writing a big check to the IRS, then
you ought to claim more deductions.
However, the IRS has already taken into account withheld taxes and if
sufficient taxes are not withheld, you'll be asked to pay quarterly
taxes.
|
| 453.2 | Approximate your tax | CTHQ::BELENKY | | Fri Apr 16 1993 11:23 | 33 |
| To take advantage of mortgage/tax deductions, you have to make an
estimate of your mortgage expenses (on Schedule A).
If you know approximate values for your condo mortgage interest and
property tax, use Schedule A to sum it up. Then subtract it from your
AGI.
Example: Mortgage interest = $800/mo = $9600/year; Property tax =
$1400/year; your annual salary $40,000; your current Fed.tax =
$6,000/year; Schedule A (itemized deductions) = $11,000.
Wage = $40,000
Bank interest = 300
-----------
AGI 40,300
Item. deductions - 11,000
Personal exemp. - 2,300
----------
Taxable income = 37,000
Approx. Tax = 37,000 x 0.15 = $5,550
Schedule A allows you take other deductions (charity, medical,
educational, etc).
Now compare your current fed. tax and one you got using itemized
deductions and change your weekly withholdings accordingly. Each
exemption = $10-15/week.
Simon
|
| 453.3 | | VMSDEV::HAMMOND | Charlie Hammond -- ZKO3-04/S23 -- dtn 381-2684 | Fri Apr 16 1993 12:27 | 8 |
| I believe there is a worksheet with the W4 form that you file
to tell Digital (or?) how many dependents you claim for withholding.
It explains how to extimate your deductions and calculate the
number of witholding dependents you're allowed to take.
As a practical matter, you can CHANGE the number of dependents you
claim and then see exactly how this changes your weekly (or monthly,
or?) witholding. Depending on what you see, you can make more changes.
|
| 453.4 | Personnel has withholding tables | MKOTS3::DAY | Roseann Day | Sat Apr 17 1993 09:03 | 12 |
|
re. -1. Instead of fiddling with your exemptions (which has to cost
Digital some processing time and money), you can ask your personnel
admin person for this year's withholding tables. The tables show how
much is taken each week at each exemption level for each tax marital
status for a fairly broad range of incomes. If your income is above
the max the tables cover, you can ask for more information about the
formula used.
The spreadsheet that makes up the top part of the W4 is pretty useful.
That plus an idea of last year's tax liability plus the tables and you
should be all set... til the tax code gets totally rewritten.
|
| 453.5 | The "rule of thumb" for deductions | MPGS::BEAULIEU | | Thu May 06 1993 13:10 | 12 |
| I have read that a good general rule of thumb is to take 1 deduction for
every $600 you got back last year. I decided to change my deductions this
year and got a copy of the withholding tables to determine how many
deductions to take etc and the "rule" proved to be about right.
This rule may not necessarily apply in the base-noters case however
because he/she will have a significant deduction this year that did not
exist in previous years. Next year the size of the deduction will
probably be about 2x this year's deduction considering that they will
probably make about 5 or 6 mortgage payments this year and will make
about 12 next year. In order to avoid making interest-free loans to
Uncle Sam, the base-noter may have to adjust his deductions this year
and then again next year if they want to break-even with Uncle Sam.
|
| 453.6 | | CAMONE::ZIOMEK | Pump up the TEST | Mon May 10 1993 13:28 | 21 |
|
I was/am in the exact same situation. I'm in my mid 20's and had my
first mortgage in 1991, and got close to a month and a half's take home
salary back as a refund.
So last january I increased from 0 to 1 deduction, I still
ended up getting a very considerable refund for 92', but I also had a
small loss in there as well. So this year I went to 2 deductions, which
will be about $700 more in my pocket, which will leave me with a few
hundred dollar return. Assuming no changes in the tax law.
I do however have two friends that have gotten married over the
last year or so, that were in the same predicament that I was, where as
they both held mortgages before they married. One of my friends wife
works and the other friends doesn't. The friend who's wife works ended
up owing a very substantial penalty that even included a fine I think.
So when you marry, it looks like your withholding is adjusted as well.
It looks like my friends just didn't realize it.
John
|
| 453.7 | Tax obligations after marriage | HDLITE::HORTON | Ken Horton, KA1GFN | Mon May 10 1993 14:06 | 9 |
| The first year that I got married I ended up oweing a fair amount but not
enough to apy a penalty. I actually end up claiming 0 and also have a fixed
amount taken out in addition. This is the result of my wifes employer not taking
enough out to cover our total tax obligation when our salries are added together.
This is not really the fault of the employer as she would be in a 15% bracket
and I am in a 28% with the total also being in a 28%. So this may be something
that is worth watching.
/Ken
|
| 453.8 | that's the "marriage penalty tax"! | CADSYS::HECTOR::RICHARDSON | | Mon May 10 1993 15:12 | 17 |
| That's the "marriage penalty tax" for you! it was several years after
Paul and I got married (both DECcie engineers) before our take-home pay
got back up to what it was before we got married and had to readjust
our withholding to cover the much-higher taxes! This comes about
because the boundaries for the different tax brackets for married
people are not twice what they are for single people. Right now, we
both claim no exemptions plus have a fixed amount in addition witheld
per week on our federal taxes. I need to file new W4 (when I get
around to computing them) to increase the fixed amount again. This was
esxpecially a shocker for me since I owned our house before we married.
I went from claiming several exemptions ebcause of the mortgage
payments on the house to the current situation, and I had a LOT less
moeny (and the giver-ment a LOT MORE of MY money) to spend for several
years thereafter! Suchadeal.... The additional taxes are a LOT more
than the rent was on Paul's apartment. Phooey!
/Charlotte
|
| 453.9 | | SUBURB::THOMASH | The Devon Dumpling | Tue May 11 1993 09:30 | 14 |
|
What about a new system,
Both people have individual allowances.
A married personas allowance, that is split between the two people,
or if requested will all go on one persons.
Mortgage deduction to be split however requested.
No joint filing, no need to know the other persons investments/salaries
etc.
Heather
|
| 453.10 | | VMSDEV::HAMMOND | Charlie Hammond -- ZKO3-04/S23 -- dtn 381-2684 | Tue May 11 1993 10:05 | 8 |
| RE: 453.7
> ... [My wife] would be in a 15% bracket
>and I am in a 28% with the total also being in a 28%. ...
This sounds like a situationn in which "married filing seperately"
might be better than a joint return. Did you run the numbers that
way? (NOTE: I said *MIGHT*. It depends on all the details, etc.)
|
| 453.11 | The past has not lended itself to MFS | HDLITE::HORTON | Ken Horton, KA1GFN | Tue May 11 1993 10:15 | 7 |
| I tried the number with MFS but did not come out any better. The problem is
that she would not have any deeductions so would end up having to claim 0 since
she cannot take the standard. But with mortgage interest getting so low and
and the standard deduction going up I may not have to itemize in upcoming years.
/Ken
|
| 453.12 | Determining Number of Exemptions | SHRCTR::JRUSSELL | | Tue Apr 09 1996 10:29 | 9 |
| Is there a formula to use to determine the number of exemptions to
claim on your paycheck?
We typically use Dependent Care Reimbursement but didn't do it this
year and now would like to adjust the exemptions to compensate.
Thanks for any input.
Judy
|
| 453.13 | w-4 | MROA::JALBERT | | Tue Apr 09 1996 11:01 | 6 |
| I know Form W-4 -- Employee's Witholding Allowance Certificate had two
pages of Highlights which assisted you with calculating exemptions.
I have a copy of one and would be happy to send it out to you.
Carla
|
| 453.14 | The W-4 instructions always leave me paying too much in taxes | 2303::TALCOTT | | Wed Apr 10 1996 10:01 | 96 |
| But I typically send mail to CANON::PAY_QUESTION yearly requesting a copy of
their sheet that maps pay to witholdings, and then based on our previous year's
tax and projected income, determine how many exemptions to claim. I haven't
gotten this year's sheet but as an example, here's last year's version:
From: CANON::PAY_QUESTION "US PAYROLL CUSTOMER SERVICE" 22-MAR-1995 12:27:23.18
To: UHUH::TALCOTT
CC: PAY_QUESTION
Subj: RE: Fed tax: Looking for mapping of # of exemptions to amount withheld
ANNUAL PAYROLL PERIOD
(1995)
One withholding allowance is equal to $2,500.00
SINGLE (including head of household)
if the amount of wages after
subtracting withholding The amount of income tax
allowances is: to withhold is:
Not over $2,600..... $0
Over But not over of excess over
$2,600.......$24,750....... 15% $ 2,600
$24,750......$51,950......$ 3,322.50 plus 28% $ 24,750
$51,950......$119,350.....$10,938.50 plus 31% $ 51,950
$119,350.....$257,900.... $31,832.50 plus 36% $119,350
$257,900................. $81,710.50 plus 39.6% $257,900
MARRIED
if the amount of wages after
subtracting withholding The amount of income tax
allowances is: to withhold is:
Not over $6,400..... $0
Over But not over of excess over
$6,400.......$43,050....... 15% $ 6,400
$43,050......$86,550......$ 5,332.50 plus 28% $ 43,050
$86,550......$147,650.....$16,980.50 plus 31% $ 86,550
$147,650.....$260,550.....$35,704.50 plus 36% $147,650
$260,550..................$75,304.50 plus 39.6% $220,550
How to use annual table:
1. Use your weekly ADJUSTED GROSS from you paystatement and multiply by
52 weeks. This is your annualized adjusted gross pay
2. From your annualized adjusted gross, subtract $2,500 for each
withholding allowance (exemption) you are claiming. This is your
taxable income.
3. Select the table according to your tax status (single or married).
4. Find the taxable income amount in step two, and follow the
calculation. This is you annual federal tax to be withheld.
5. Divide the amount in step 4 (annual federal tax) by 52. This will
be the federal tax amount withheld each week.
Example:
Weekly Adjusted Gross $1500.00
Marital Status Single
Withholding Allowances 1
$ 1500.00
x 52
----------
$78,000.00 annual adjusted gross
-$ 2,500.00 one withholding allowance
----------
$75,500.00 annual taxable income
-$51,950.00 amount from table
----------
$23,550.00 excess over $51,950.00
X 31%
----------
$ 7,300.50 tax on excess over $51,950.00
+10,938.50 from table
----------
$18,239.00 annual federal tax withheld
divide by 52 weeks
---------------
$ 350.75 weekly federal tax withheld
US Payroll Customer Service
|