|Quote, originally posted by speeddemon »|
|how much of a difference will it make if i claim 2 or 3. and is there anything legal i have to worry about? does the irs care if i claim 1 or 5? or is it just as long as they get there money by april. thanks for any help |
right now it seems about 25% or my check is gone, does anyone know how much it will change?
Read IRS Publication 15 from http://www.irs.gov to figure out how much of a difference each exemption claim makes on withheld taxes. However, if you can estimate your deductions and credits fairly accurately, the worksheet on the W-4 form may tell you to claim a number that will result in withholding closer to your actual tax bill. Note that under-withholding by a lot can result in penalties (see form 2210 from the IRS web site).
Since you may be in California, note that the California withholding exemption formula is different. Look for California form DE-4 from http://www.ftb.ca.gov to adjust your California withholding. If you just use the number of exemptions from the W-4 for California state exemptions, it may be wrong. There is also a California publication describing how much withholding changes when the number of exemptions claimed on DE-4 changes.
Modified by tjl at 10:39 PM 8-18-2005