New Job- Dependent Question | TigerDroppings.com

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dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
5381 posts

New Job- Dependent Question



Ok starting a new job next week and I've been at my current job for 8 years back when I was single and no kids


I'm trying to get everything ready for new ppw with new job and I looked at my 2012 W2 and it says I have 1 federal dependent and 0 state dependents


I have no idea what that means but here's my question. I'm now married with two kids so what should I put down on my new payroll ppw to get the best tax break?


Please explain if you can. Yes I know what google is but it was greek when I did a search







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Tenforty1728
LSU Fan
Baton Rouge
Member since Oct 2012
64 posts

re: New Job- Dependent Question


A W-4 asks for a number of "allowances" rather than a number of dependents. It tries to factor in other items such as the child tax credit and the dependent care credit to more accurately withhold taxes throughout the year and prevent a large balance due, or a large refund.

As far as a "tax break" from what you put down, it won't matter. It will just affect what you get back or owe at the end of the year. The lower the number of allowances, the more taxes are withheld from your paycheck.

If you're married with 2 kids, you should put at least 3 allowances. If you typically get the child tax credit ($1,000) you should add an allowance for each credit you usually receive. I would suggest being conservative with this and putting 3 total allowances and see where that puts your refund at the end of '13. You shouldn't owe anything (assuming you have no income outside of your w-2) but your refund may still be large, meaning you didn't have access to that money during the year and gave uncle sam an interest free loan. But the flip side of that is putting too many allowances and owing him something at the end of the year, so I tell my clients to err on the side of a refund.

Hope this helps






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dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
5381 posts

re: New Job- Dependent Question


Ok thanks a bunch.


Here's my next question


I get a good chunk in tax return as is so are you saying if I put 3 down then this will go down?

Also will going from 1 to 3 mean my checks will go up or down?






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Tenforty1728
LSU Fan
Baton Rouge
Member since Oct 2012
64 posts

re: New Job- Dependent Question


Yes your refund will go down, but your checks throughout the year will go up. You're not leaving any money out there or anything, just spreading it out through each paycheck rather than a big refund at the end of the year.





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dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
5381 posts

re: New Job- Dependent Question


thats what i needed to know. thanks buddy





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dallastiger55
LSU Fan
Jennings, LA
Member since Jan 2010
5381 posts

re: New Job- Dependent Question


so what would u do if you were me? leave it as 1 and keep doing what im doing? i like that big check every march





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trident
Tennessee Fan
Member since Jul 2007
3396 posts

re: New Job- Dependent Question


no. Put 3 and get a little more money back each pay check. If you owe at the end of the year decrease the allowances to 2. Basically you want to be as close to $0 for federal returns as possible.

But if you like the big check at the end (I understand, kind of like a yearly bonus) leave it as is






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Ace Midnight
LSU Fan
Currently asymptomatic
Member since Dec 2006
33473 posts

re: New Job- Dependent Question


quote:

But if you like the big check at the end (I understand, kind of like a yearly bonus) leave it as is


There's another option - a better option - get the March "refund" numbers as close to zero as possible (heck, I'd almost prefer to pay $50 to $100), then put $20 to $50 per paycheck into a Christmas Club, or some other forced savings - get into that habit, eventually, your money will work for you. Increase it to $100, $200 or more per paycheck and you'll wonder why you ever let Uncle Sam hold your money interest free.







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lnomm34
USA Fan
Louisiana
Member since Oct 2009
8081 posts

re: New Job- Dependent Question




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Tenforty1728
LSU Fan
Baton Rouge
Member since Oct 2012
64 posts

re: New Job- Dependent Question


I would probably put 2 allowances on my W-4 and enjoy the small bit "extra" i'm keeping each paycheck while still making sure I don't owe at the end of the year.

I'm a CPA, so granted I stay much closer on my taxes than your average joe, but I really like to spot check my withholding around October each year. If you have a good CPA they can do this for you pretty cheaply and see where you stand. Many people have paid in enough by the end of October and can not withhold any on their November or December paychecks rather than waiting until March to get that money that is rightfully yours. Everyone can use a little extra cash around the holidays.






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