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Message
Tax withholdings on paycheck
Posted on 8/1/14 at 7:50 am
Posted on 8/1/14 at 7:50 am
So when I got my job like 9 years ago when it was time to choose my tax withholdings I picked single with 1 exemption and never thought about it again.
On our most recent pay checks they went digital and it has all the information including tax withholdings so it was the first time I had seen "single"...
Well I've been married for almost 5 years. Would it save me money to go ahead and get that changed to married or does that have any affect on what you bring home each month or collect/owe from the IRS every spring?
On our most recent pay checks they went digital and it has all the information including tax withholdings so it was the first time I had seen "single"...
Well I've been married for almost 5 years. Would it save me money to go ahead and get that changed to married or does that have any affect on what you bring home each month or collect/owe from the IRS every spring?
3
Posted on 8/1/14 at 7:56 am to RandySavage
(no message)
This post was edited on 6/11/15 at 9:26 am
Posted on 8/1/14 at 8:04 am to RandySavage
It doesn't really make a difference. You either get a little more money on your check each pay period, or you get a larger refund/smaller balance due come tax time.
I've always preferred getting a larger refund and putting the money towards a vacation, home improvement, college fund for kids, etc. We usually only get about $2,000 back though. With interest rates as low as they are on a savings account, the old "giving the government an interest free loan" doesn't really matter. You're not losing that much money.
I've always preferred getting a larger refund and putting the money towards a vacation, home improvement, college fund for kids, etc. We usually only get about $2,000 back though. With interest rates as low as they are on a savings account, the old "giving the government an interest free loan" doesn't really matter. You're not losing that much money.
Posted on 8/1/14 at 8:15 am to RandySavage
Electing "single" status withholds at a higher rate. Thus, you will see less on each paycheck. If you change your election to "married" you will see more money on each paycheck. Either way, you will get a refund on the additional withheld at the single rate at the end of the year. It is a matter of preference as to if you want the money now with each pay check or later in the form of a refund at the end of the year.
This post was edited on 8/1/14 at 8:17 am
Posted on 8/1/14 at 8:34 am to The Spleen
quote:
I've always preferred getting a larger refund and putting the money towards a vacation, home improvement, college fund for kids, etc. We usually only get about $2,000 back though
Looks like we are in the exact same boat.
Thanks for the info guys, I'll just leave it as is. Glad I wasn't missing out on money the last 4 years.
Posted on 8/1/14 at 4:16 pm to RandySavage
quote:
Thanks for the info guys, I'll just leave it as is. Glad I wasn't missing out on money the last 4 years.
You are missing out on the opportunity cost of the IRS holding your money for you. You could set up a savings account and have a portion of your check deposited into that account and earn some interest.
Posted on 8/1/14 at 4:26 pm to CubsFanBudMan
quote:
You could set up a savings account
And after 10 years or so bring the whole family to P.F. Chang's!
Posted on 8/1/14 at 4:42 pm to CubsFanBudMan
So single and zero is the worst withholding?
Posted on 8/1/14 at 7:36 pm to Paul Allen
quote:
So single and zero is the worst withholding?
It will withhold the most, if that's what you mean.
Posted on 8/1/14 at 8:59 pm to Teddy Ruxpin
quote:
And after 10 years or so bring the whole family to P.F. Chang's!
Well, that's assuming he doesn't invest that money and make more on it during the course of the year than a simple savings account would.
Actually, forget I said that. Can I have $2000 if I promise to give it all back to you and not one penny more next year?
This post was edited on 8/1/14 at 9:01 pm
Posted on 8/2/14 at 11:53 pm to Jcorye1
So is single and one better than single and zero? How much more money per paycheck are we talking about?
Posted on 8/3/14 at 8:45 am to Paul Allen
quote:
So is single and one better than single and zero? How much more money per paycheck are we talking about?
Your net pay will be more with single and one than it is with single and zero. How much depends on how much money you make. Google a paycheck calculator and it will let you plug in all your info and show you the difference.
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