Question about W-4's

[nomoretogive]

I just asked a paralegal this question and he said he wasn't sure as this had never been brought up before that he could remember. But if not filing until July or so and in anticaption of the trustee wanting 2008 tax return. Is it okay to go ahead and change W-4 from 0 dependents to two before filing? Thank you in advance for any info anyone may have.

[PaKettle]

Good question.
It will increase your take home so if it doesn't adversely affect your means test (too much disposable income) then it should be okay. But hopefully someone who KNOWS will reply.

What I do know is that AFTER you file you can change it, no problem. I changed mine to 8 so we'd get more money in our pocket after filing (instead of getting it back as a tax refund). Just don't forget to change it back later so you don't owe too much taxes next year - if that would be the case.

(As to changing it back later, there is a post here somewhere I posted recently that has the link to the IRS Withholding Calculator which helps you figure out exactly how many dependents to claim on the w4 in order not to owe taxes nor get back a refund at the end of the year.) (Someone else posted it here before me; I don't want to take their credit, but I don't recall who. Maybe lrprn?)

[nomoretogive]

Thank you. I wasn't sure if a trustee would have issues with this if you normally get a return and then do not.

[rfassett]

http://www.irs.gov/individuals/page/0,,id=14806,00.html

Try this one. If that doesn't work, just go to irs.gov and do a search for w-4 calculator.

I agree with PaKettle, your first concern pre-filing is how that adjustment would affect your disposable income for the means test. If that is not a concern, outside of the stated restrictions on the instructions for the W-4, no one can dictate to you what you put on the w-4. Every person's situation is different and there is absolutely no rule to have excess withholding. There are rules the other way, but you can not be forced to use the IRS as a savings account, and in fact, I would always suggest against that. The lower the refund while avoiding having to write a check should be every taxpayer's goal. Why in the world would you want to give the government an interest free loan? Take that excess money and put it in a savings account. If you are not disciplined enough to do that, ask your employer to do it for you, ie, a payroll deduction savings account.

[nomoretogive]

Thanks again guys. I really appreciate your replies.

[JollyGG]

the web address can also be found in "links for members" sticky in the general bankruptcy section if you need it in the future.

[southernbelle]

Because of my divorce, I changed mine from 02 to zero about 2 weeks before I filed, which increased my disposable income. In my case, I was justified to change it and there was only one paycheck with the new amt. shown on it. The trustee never said anything so I guess it was okay.