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Thread: Zero or One

  1. #1
    Featured Member greggy's Avatar
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    Default Zero or One

    I'm not quite sure if on my W-4 form, I should be a 0 or a 1. I don't want to owe money when I file, which usually ends up happening (only $30 or so).

    I live at home with my mom, but I pay $400/month in "rent". Which should number should it be?
    Last edited by greggy; 09-18-2007 at 12:06 PM. Reason: spelling, as always

  2. #2
    Banned Melonie's Avatar
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    Default Re: Zero or One

    insufficient data ... much depends on your average amount of pre-tax income, your typical amount tax deductions, your filing status, number of dependents you can claim etc.

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    Featured Member greggy's Avatar
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    Default Re: Zero or One

    Wow, ok. well, no dependents, $400/week pre-tax, single, and I don't have any deductions (at least not that I know of). Hm, I might just ask my mom's accountant next time I see him. I ended up putting a zero and having an additional $10/week taken out of my check.

    Around tax season, all my friends are getting huge returns and I can never figure out what I'm doing wrong.

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    Banned Melonie's Avatar
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    Default Re: Zero or One

    ^^^ actually it's a matter of what you're doing 'right' versus what your friends are doing 'wrong'. Basically, having more money withheld in the form of weekly employee paycheck deductions, and/or excessively high independent contractor business estimated tax payments, amounts to giving the gov't a FREE LOAN of your money. Your friends that are getting $1000 tax refunds in actuality lost out on $25 worth of interest earnings !

    Living in New York, with a 52 * $400 = $20,800 gross income, other than the 7.6% 'employee' social security tax, your federal and state tax liabilities should only add up to a few hundred dollars ... PROVIDED that you are able to claim yourself as a dependent on your own tax return. However, if your mother still claims you as her dependent, then you are unable to claim yourself and you will owe a bit more in income taxes.

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    Banned Katrine's Avatar
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    Default Re: Zero or One

    Listen to Melonie on this one. Why the heck would you want to give the IRS an interest free loan throughout the year.

    Actually, by owing IRS $30, you are doing everything exactly right, all other things being equal.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Featured Member paintgoddess's Avatar
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    Default Re: Zero or One

    Yeah, make sure you know whether or not your mom is going to claim you as her dependent or not. If she does, you can't claim yourself.

    My dad insisted one year that the IRS wouldn't notice if he claimed my little sister as a dependent, as she was also claiming herself. Um, good idea, Dad. Way to cost my sister an ass-load of money. Like hell they "won't notice."
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    Banned Melonie's Avatar
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    Default Re: Zero or One

    ^^^ yes, the whole 'under age 24' IRS situation with emancipation vs dependent status can get real messy - and can also cause a lot of animosity between family members regarding who gets to claim the 'cash value' of the dependent. This problem gets further compounded when the 'under age 24' person is also a college student, which brings another whole layer of financial / tax reporting 'consistency' into the picture due to grant applications based on 'family income' plus automatic reporting of tuition payments by colleges to the IRS.

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    Featured Member greggy's Avatar
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    Default Re: Zero or One

    I'm pretty sure that my mom is going to claim me as a dependent. I'm fine with her doing that if it helps her out. I guess I had just assumed, and wrongly at that, that even if more money is withheld from my check, I would end up get it back in the form of a refund when I file.

  9. #9
    Banned Katrine's Avatar
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    Default Re: Zero or One

    Quote Originally Posted by greggy View Post
    I'm pretty sure that my mom is going to claim me as a dependent. I'm fine with her doing that if it helps her out. I guess I had just assumed, and wrongly at that, that even if more money is withheld from my check, I would end up get it back in the form of a refund when I file.
    Yes. However, why do you want to give the IRS more money than you owe them? Who's going to need it more? You? Or Uncle Sam?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

  10. #10
    AudreyLeigh
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    Default Re: Zero or One

    ^^^ because to some people - its better to get $1000 - $25 of interest than to get that extra few dollars a paycheck. I know I would spend that extra few bucks on starbucks but the $1000 would go to better use because its a lump sum. This is comming from someone who cannot save a dollar to save her life.

    Its almost worth 'paying' the gov't $25 to hold onto it like a savings acct you cant touch until the next year.

    Just my $0.02

  11. #11
    Featured Member greggy's Avatar
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    Default Re: Zero or One

    ^^^ I must confess, this is exactly how I feel. I'm horrible at saving money, even when I do an automatic savings plan or something. So yea, receiving a $1000 check at once would be better for me.

    I just wanted to ensure that I get a check rather than a bill.

  12. #12
    Banned Katrine's Avatar
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    Default Re: Zero or One

    Perhaps you should empower yourselves to take control of your own destinies.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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