Allowances on W-4

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Anonymous User
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Allowances on W-4

Postby Anonymous User » Sun May 24, 2015 1:06 pm

I will be working at a boutique civil rights firm in the south for my SA. I will be making $1,500/wk for a total of 8 weeks. I am K-JD. How many allowances should I take out? Why? - Could I take this money and invest it before tax season?

I am very confused about this.


Anonymous User
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Re: Allowances on W-4

Postby Anonymous User » Sun May 24, 2015 5:16 pm

The link is nice, but it would be helpful for someone to explain the questions I posed in the OP

Big Dog
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Re: Allowances on W-4

Postby Big Dog » Sun May 24, 2015 5:59 pm

How many allowances should I take out? Why?


Any other income, either a job or investment income? Single? Have any dependents? How about large deductions, such as medical? Do you want a big refund next April? Would you rather owe money then, or breakeven, i.e., your withholdings will match what you owe.

Then the IRS calculator becomes rather easy to use... (And notice, that it is impossible for anyone to answer your questions, since no one has the answers to such questions but you.)

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POTUSorSCOTUS
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Re: Allowances on W-4

Postby POTUSorSCOTUS » Sun May 24, 2015 6:14 pm

Big Dog wrote:
How many allowances should I take out? Why?


Any other income, either a job or investment income? Single? Have any dependents? How about large deductions, such as medical? Do you want a big refund next April? Would you rather owe money then, or breakeven, i.e., your withholdings will match what you owe.

Then the IRS calculator becomes rather easy to use... (And notice, that it is impossible for anyone to answer your questions, since no one has the answers to such questions but you.)



Thx Bigdog, I am trying to figure out the advantage in taking out more allowances. Is it just to get more $ from each paycheck, and to use that $ to invest before having to pay IRS?

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lawhopeful10
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Re: Allowances on W-4

Postby lawhopeful10 » Sun May 24, 2015 6:19 pm

Yea you don't have to wait to get as much back in your tax refund. The service doesn't know you are only working part of the year which is why the allowances help here. Present day money is worth more than future money because you can invest it but even if you wouldn't do that you still might just want the money faster.

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POTUSorSCOTUS
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Re: Allowances on W-4

Postby POTUSorSCOTUS » Sun May 24, 2015 6:23 pm

lawhopeful10 wrote:Yea you don't have to wait to get as much back in your tax refund. The service doesn't know you are only working part of the year which is why the allowances help here. Present day money is worth more than future money because you can invest it but even if you wouldn't do that you still might just want the money faster.


The calc says I should have 10 allowances, but I see many posters stating 20-30 allowances. What is the difference in $ bt/w 10 and ~25 allowances? Negligent? Substantial?

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lawhopeful10
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Re: Allowances on W-4

Postby lawhopeful10 » Sun May 24, 2015 6:28 pm

A lot of posters make 3k / a week. Since you are making less than that it makes sense you won't need as many allowances. Similarly I took single digit allowances because I'm making like 1k a week for 12 weeks. It just depends.

Big Dog
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Re: Allowances on W-4

Postby Big Dog » Sun May 24, 2015 8:34 pm

What is the difference in $ bt/w 10 and ~25 allowances?


The calculator is designed so that you won't owe any money to the IRS or they won't owe you. (Plus or minus a few bucks.)

The "difference" in maxing out allowances is: a) owing the IRS money in April; 2) owing a penalty on the under withholding. (IRS regs require that you let the employer withhold 90% of your expected tax bill by the end of the year. If you max out the withholdings you will be under-withheld and subject to a penalty.)




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