Fall Associate Tax Forms Forum

[Anonymous User]

I'm a 3L, starting in CA BigLaw this fall, and filling out the tax forms. Those who has gone through this before, do you have advice for maxing out exemptions? I already used the IRS calculator and got 15 for federal taxes. Does that sound right - I know standard is only 1-3. Also, how do you calculate for CA taxes? The CA worksheet doesn't have much wiggle room and I end up with just 1 using the worksheet calculations.

[LA Spring]

Routinely single people tend to claim 0 or 1 exemption. IMHO: If you start wildly adding exemptions the firm will most likely view you as bizarre. (People in HR are not supposed to gossip, but they do.)

[unlicensedpotato]

Routinely single people tend to claim 0 or 1 exemption. IMHO: If you start wildly adding exemptions the firm will most likely view you as bizarre. (People in HR are not supposed to gossip, but they do.)

Please don't waste people's time if you have no clue what you're talking about.

OP - Yes, I had 14 for my stub year.

[Right2BearArms]

Routinely single people tend to claim 0 or 1 exemption. IMHO: If you start wildly adding exemptions the firm will most likely view you as bizarre. (People in HR are not supposed to gossip, but they do.)

Yeah this is really dumb. If you use the calculator, you are not "wildly" adding exemptions, you are being smart and saving yourself tax burden within the law. I took either 14 or 15 for my summer, and 11 iirc for my stub year. No problems.

[Anonymous User]

OP here - thanks for the tips! When do you adjust your exemptions after the stub year (first full year)? Also, what about state exemptions? CA doesn't have a calculator, only a worksheet and I end up with 1.

[Danger Zone]

OP here - thanks for the tips! When do you adjust your exemptions after the stub year (first full year)? Also, what about state exemptions? CA doesn't have a calculator, only a worksheet and I end up with 1.

Contact your firm's HR department/benefits coordinator in December and let them know you want to fill out a new form for your 2017 withholdings.

For state I just did 1 because it seemed like a lot of work for minimal reward, but honestly you can figure it out yourself by calculating your AGI.

[Anonymous User]

A similar question... would it be frowned upon to put an extreme number of allowances (based upon my bar stipend as my only income for the year) to maximize the amount of my stipend I get and then to update my W-4 before my actual start date?

[Tiago Splitter]

A similar question... would it be frowned upon to put an extreme number of allowances (based upon my bar stipend as my only income for the year) to maximize the amount of my stipend I get and then to update my W-4 before my actual start date?

I doubt you'll fill out a W-4 before starting. The bar stipend is generally a fixed amount.

Regardless it does not matter one bit to the firm how many allowances you choose. Also your income for the year will include your stub year income unless you don't plan to start until January.

[Anonymous User]

Apologies for thread hijacking but do biglaw associates in their stub year itemize deductions? My state/local taxes < personal deduction (6,200), but I went into doing my taxes thinking I would itemize.

Also, do you count the amount the firm paid for bar prep as income?

[Danger Zone]

Apologies for thread hijacking but do biglaw associates in their stub year itemize deductions? My state/local taxes < personal deduction (6,200), but I went into doing my taxes thinking I would itemize.

Also, do you count the amount the firm paid for bar prep as income?

Yes, the bar expenses will show up in your W2.

As for itemizing, it depends. As a rule, only itemize if your deductions will total more than the standard deduction. That's something you'll have to calculate for yourself.

[twenty 8]

I always claim 1 exemption. That said, the idea of plugging in 10 exemptions would mean an extra $950 a month (if I am plugging the right info into this online paycheck calculator)…I imagine the downside is no refund (which I always look forward to). In any case, doubt if I’ll change my status, but still good to know!

[Danger Zone]

I always claim 1 exemption. That said, the idea of plugging in 10 exemptions would mean an extra $950 a month (if I am plugging the right info into this online paycheck calculator)…I imagine the downside is no refund (which I always look forward to). In any case, doubt if I’ll change my status, but still good to know!

The reason OP would claim more than 1 exemption is because they are only working a few months of the year. The employer, however, withholds as if you are working there the whole year. So if you are employed full time for the year, you should only put 1 or 0 or whatever the worksheet says you should put. If you were to put 15, you'd probably owe the IRS a lot of money at the end of the year.

[RaceJudicata]

I always claim 1 exemption. That said, the idea of plugging in 10 exemptions would mean an extra $950 a month (if I am plugging the right info into this online paycheck calculator)…I imagine the downside is no refund (which I always look forward to). In any case, doubt if I’ll change my status, but still good to know!

Time value of money. Not prudent to wait for the refund... unless you aren't financially responsible and are just going to blow that extra money. Invest it and (hopefully) get a decent return.

[Anonymous User]

Is the bar price that shows up on the W2 the sticker cost of the course or what the firm actually paid? I'd imagine they all get a volume discount.

[Danger Zone]

Is the bar price that shows up on the W2 the sticker cost of the course or what the firm actually paid? I'd imagine they all get a volume discount.

Actually paid

[Saddle Up]

As an SA this past summer, I never heard of anyone claiming so many exemptions. For certain, the optics are terrible.

[ballouttacontrol]

As an SA this past summer, I never heard of anyone claiming so many exemptions. For certain, the optics are terrible.

i did like 30 something because I was going to owe basically zero, what the fuk is the problem? That the HR lady will know I have a few tax deductions that the KJDs dont?

[unlicensedpotato]

As an SA this past summer, I never heard of anyone claiming so many exemptions. For certain, the optics are terrible.

i did like 30 something because I was going to owe basically zero, what the fuk is the problem? That the HR lady will know I have a few tax deductions that the KJDs dont?

I typed up a huge rant in response to this but decided against posting it. The short version is:

Saddle Up you are completely wrong --

(1) Adjusting the exemptions is based on an IRS calculator that is designed to match the amount to be withheld to what your actual annual income will be (because you are only working 8-12 weeks, not 52). It is completely normal from a tax standpoint and, from an economics standpoint, people who don't do it are making a mistake (although it isn't as big of a deal with interest rates so low currently). It isn't some weird tax maneuver; it is what the IRS intends for people to do

(2) There is no optics issue. Again, this is actually the smarter decision. No attorneys or recruiting personnel involved in hiring decisions have any clue what your exemptions are (and they don't care at all!). HR / Accounting people have no say in anything "relevant" to an SA and would never communicate with attorneys about something like this. And again, you are actually making the smarter/"correct" decision, so even if someone did for some reason know or care, it would be a positive, not a negative.

[ballouttacontrol]

As an SA this past summer, I never heard of anyone claiming so many exemptions. For certain, the optics are terrible.

i did like 30 something because I was going to owe basically zero, what the fuk is the problem? That the HR lady will know I have a few tax deductions that the KJDs dont?

I typed up a huge rant in response to this but decided against posting it. The short version is:

Saddle Up you are completely wrong --

(1) Adjusting the exemptions is based on an IRS calculator that is designed to match the amount to be withheld to what your actual annual income will be (because you are only working 8-12 weeks, not 52). It is completely normal from a tax standpoint and, from an economics standpoint, people who don't do it are making a mistake (although it isn't as big of a deal with interest rates so low currently). It isn't some weird tax maneuver; it is what the IRS intends for people to do

(2) There is no optics issue. Again, this is actually the smarter decision. No attorneys or recruiting personnel involved in hiring decisions have any clue what your exemptions are (and they don't care at all!). HR / Accounting people have no say in anything "relevant" to an SA and would never communicate with attorneys about something like this. And again, you are actually making the smarter/"correct" decision, so even if someone did for some reason know or care, it would be a positive, not a negative.

This doesn't seem like I'm the one completely wrong then huh cabrón?? Jajaja less u meant that at the pendejo abov me... in wich case I agree w u cuz .. Im tryna pay as little tax as possible erry paycheck but ik u feel me regardless tho then jaja so.....I feel u bra lol. Duces 2 that pendejo up there tho ^^^^

[A. Nony Mouse]

He was talking to the user Saddle Up (above you), not telling you to saddle up.

[Danger Zone]

As an SA this past summer, I never heard of anyone claiming so many exemptions. For certain, the optics are terrible.

i did like 30 something because I was going to owe basically zero, what the fuk is the problem? That the HR lady will know I have a few tax deductions that the KJDs dont?

I typed up a huge rant in response to this but decided against posting it. The short version is:

Saddle Up you are completely wrong --

(1) Adjusting the exemptions is based on an IRS calculator that is designed to match the amount to be withheld to what your actual annual income will be (because you are only working 8-12 weeks, not 52). It is completely normal from a tax standpoint and, from an economics standpoint, people who don't do it are making a mistake (although it isn't as big of a deal with interest rates so low currently). It isn't some weird tax maneuver; it is what the IRS intends for people to do

(2) There is no optics issue. Again, this is actually the smarter decision. No attorneys or recruiting personnel involved in hiring decisions have any clue what your exemptions are (and they don't care at all!). HR / Accounting people have no say in anything "relevant" to an SA and would never communicate with attorneys about something like this. And again, you are actually making the smarter/"correct" decision, so even if someone did for some reason know or care, it would be a positive, not a negative.

This doesn't seem like I'm the one completely wrong then huh cabrón?? Jajaja less u meant that at the pendejo abov me... in wich case I agree w u cuz .. Im tryna pay as little tax as possible erry paycheck but ik u feel me regardless tho then jaja so.....I feel u bra lol. Duces 2 that pendejo up there tho ^^^^

Well this was a bizarre response.

Anyway, the liability for overstating your exemptions is on you so the firm shouldn't care. Though admittedly I did get a call from the HR lady double checking that I was absolutely sure that I wanted 15 exemptions haha.

[Saddle Up]

I did get a call from the HR lady double checking that I was absolutely sure that I wanted 15 exemptions haha.

That was my point. The optics are terrible.

[Aeon]

I did get a call from the HR lady double checking that I was absolutely sure that I wanted 15 exemptions haha.

That was my point. The optics are terrible.

The optics aren't terrible. HR really don't care about how many exemptions you claim. The only reason why they may want to double-check is to make sure they get your exemptions right, because if they don't and under-withhold, they have to deal with an angry law student or lawyer.

The main risk of upping exemptions for a short year is that you forget to readjust them at the beginning of the following year. Otherwise, if you calculate them correctly, you're just keeping more of your own money. The IRS withholding calculator is there for a reason.

[NotMyRealName09]

I did get a call from the HR lady double checking that I was absolutely sure that I wanted 15 exemptions haha.

That was my point. The optics are terrible.

The optics aren't terrible. HR really don't care about how many exemptions you claim. The only reason why they may want to double-check is to make sure they get your exemptions right, because if they don't and under-withhold, they have to deal with an angry law student or lawyer.

The main risk of upping exemptions for a short year is that you forget to readjust them at the beginning of the following year. Otherwise, if you calculate them correctly, you're just keeping more of your own money. The IRS withholding calculator is there for a reason.

I agree that optics are irrelevant - no one cares at all. Back when I was an SA I looked into this and I recall something about if someone claims more than 9 allowances then the employer has to specifically notify the IRS - but who cares? It's isn't illegal or improper - in fact as mentioned the IRS withholding calculator will, given the right numbers, tell you to take more than 9 allowances. I'm sorry but saying "the optics are terrible" is rediculous. Frankly, I think it's looks dumb when SAs take their 2 allowances out of timidity and fear, leaving all that cash on the table all summer long. If you do your math, taking the right allowances for an SA or stub year can give you hundreds and hundreds of more dollars per paycheck WHICH IS YOUR MONEY already. If you do your math right you will owe the IRS close to $0 in additional money come tax time--and that's a great feeling.

[Danger Zone]

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