How to reduce tax returns?

[EndInSight]

but if I am not mistaken, you can't just claim people without providing their SS#'s on your tax return. Or are you just wanting to claim more on paycheck(s) and for what reason? Your paychecks would be more BUT come tax time what will you do about SS#'s for 9 or 10 people?
Sounds weird to me but I am kinda stupie.

Miss Posh

[HHM]

but if I am not mistaken, you can't just claim people without providing their SS#'s on your tax return. Or are you just wanting to claim more on paycheck(s) and for what reason? Your paychecks would be more BUT come tax time what will you do about SS#'s for 9 or 10 people?
Sounds weird to me but I am kinda stupie.

Miss Posh

What you claim on your W-4 for with-holding and what you claim on your tax returns are separate issues and totally unrelated. The IRS gets the same amount of taxes from you regardless what you claim on your W-4. You are correct, on you tax returns, you can only claim "actual" dependants, but on your W-4, you can claim up to 10 (including yourself).

[Cali]

My hubby has 9 exemptions and we got 285$ back in taxes this year.

[PaKettle]

Cali, thanks so much for that link. It says its not up for maintenance right now but I'm just curious to know...

If I own my home and mother and father live with me and I take care of them, can I be listed as head of houshold?If so how does one get listed for that?

That IRS calculator has been down now for months. I am waiting to use it to calculate what to change my exemptions back to, after having increased them after my 341 meeting.

Not sure the answer to your question about Head of Household (try turbotax's forum if you don't get an answer here). But as to the number you claim on your W-4 you can just arbitrarily increase the amount of exemptions so that your employer takes out less taxes. When you fill out the form to increase it, it might give you the impression that you do not qualify to increase that number, (that's the impression I got when I did it) but the fact is, you can do it. Usually changing it to 8 or so gives you quite a bit more "take home pay".

Don't forget to change it back some time after your discharge though, or you may end up owing the IRS a bunch of money next year. That IRS calculator which does not work now, is designed just for that purpose, to change your w-4 exemptions so that you neither owe the IRS at the end of the year nor get money back at the end of the year. I wish I could find another such calculator on the web!

[AlmostFree]

Fine/Jail for inflated W-4 Exemptions

Hate to break the bad news on the above posts that seem to be saying you can claim as many exemptions as you want on your W-4. Your maximun # of exemptions cannot exceed the # you are legally entitled. The IRS does not want people intentionally under withholding and then never file a tax return or never pay the taxes.

There is a $500 civil fine for a false W-4. Also, a criminal offense of a $1000 fine and (or) a year in prison. Almost Free

[Cali]

Hate to break the bad news on the above posts that seem to be saying you can claim as many exemptions as you want on your W-4. Your maximun # of exemptions cannot exceed the # you are legally entitled. The IRS does not want people intentionally under withholding and then never file a tax return or never pay the taxes.

There is a $500 civil fine for a false W-4. Also, a criminal offense of a $1000 fine and (or) a year in prison. Almost Free

I disagree with you.

We are allowed to claim 12 exemptions(per IRS website), but only claim 9.

[HHM]

Hate to break the bad news on the above posts that seem to be saying you can claim as many exemptions as you want on your W-4. Your maximun # of exemptions cannot exceed the # you are legally entitled. The IRS does not want people intentionally under withholding and then never file a tax return or never pay the taxes.

There is a $500 civil fine for a false W-4. Also, a criminal offense of a $1000 fine and (or) a year in prison. Almost Free

You care to quote the specific rule or statute that says you cannot claim up to 10 so that we can all learn from your insight.

My understanding is, the amount of exemptions you claim on your W-4 ONLY become a problem if you don't pay tax due when you file your taxes. At that point they may cross check your tax return with your W-4, and either have you change your with-holding or issue your employer a "lock-in" letter that forces the employer to with hold a certain amount.

But, you CAN claim up to 10 dependants (including yourself) on your W-4 without consequence, people do it all the time and every attorney and HR person I have ever run into does not have a problem with it. The only time it becomes a problem is if you screw-up on your tax returns or fail to actually pay your taxes.

In addition, there are special rules for non-resident aliens.

Cali: but for tax withholding calculations, you want to keep you claimed dependants at 10 or less...if you claim more than 10, you are put on an entirely different withholding scale. The HR and payroll people I know generally recommend to only claim up to 10 dependants on the W-4.

[woohoogirl]

Fine/Jail for inflated W-4 Exemptions

--------------------------------------------------------------------------------

Hate to break the bad news on the above posts that seem to be saying you can claim as many exemptions as you want on your W-4. Your maximun # of exemptions cannot exceed the # you are legally entitled. The IRS does not want people intentionally under withholding and then never file a tax return or never pay the taxes.

There is a $500 civil fine for a false W-4. Also, a criminal offense of a $1000 fine and (or) a year in prison.

Almost Free, I claimed no exemptions for the first half of the year, then did the now non working calculator on the IRS site and it recommended I change my exemptions to 8 or 9 for the remander (sp) of the year. Sooooo let me ask you this question Almost Free....if the IRS say that is allowable...then how is that a criminal offense? Please by all means educated me.

[AlmostFree]

W-4 Penalties

If you are entitled, you can claim 10 or more exemptions on a W-4.

If you claim more than you are entitled, there could be penalties.
The below was pasted from IRS Pub 505

http://www.irs.gov/publications/p505/ch01.html#d0e3271

The below penalties are part of the Internal Revenue Code, Sections 6682 (civil) and 7205(criminal). Almost Free





"Penalties
You may have to pay a penalty of $500 if both of the following apply.

You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld.

You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4.


There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both.

These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. A simple error or an honest mistake will not result in one of these penalties. For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a Form W-4 penalty. However, see chapter 4 for information on the underpayment penalty."

[Cali]

If you are entitled, you can claim 10 or more exemptions on a W-4.

If you claim more than you are entitled, there could be penalties.

That is what many of us said before you said it was illegal.

[Cali]

Cali: but for tax withholding calculations, you want to keep you claimed dependants at 10 or less...if you claim more than 10, you are put on an entirely different withholding scale. The HR and payroll people I know generally recommend to only claim up to 10 dependants on the W-4.

We aren't going over 9. This year we got 285$ back in taxes, better than the 4k-5k we used to get.

[diviaruba]

High itemized deductions (mortgage interest, state income tax, property taxes, charitable deductions, etc.), capital losses, IRA contributions, child tax credits, on and on, are perfectly valid and reasonable bases for increasing your W-4 exemptions beyond the number of actual personal exemptions you will take on the next year's 1040.

The W-4 tables are predicated on the standard deduction and the number of personal exemptions. If you have the aforementioned adjustments to income (as an example only, because there are infinitely more), raising the number of exemptions will prevent gross over-withholding.

If for example, you pay $20,000 a year in mortgage and property taxes and you itemize deductions, that is $9100 more than the standard deduction of $10,900 for a married couple filing jointly. You could reduce your wage withholding by a minimum of two exemptions ($3500 each) and still not be under-withheld. The net effect is that you increase your take-home pay per pay period.

There is absolutely no requirement to justify exemption numbers by the number of people in your household, especially if you claim 10 or fewer exemptions on your W-4.

[AlmostFree]

Diviaruba,

You are absolutely correct in increasing withholding allowances because of various deductions. Personal exemptions claimed on a tax return are simply part of the "allowances" allowed on the W-4. On your W-4, You can claim less than your total "allowances". But if you claim more than your total "allowances", you possibly could be in violation of the law -- even if you claim 9 on the W-4 and you were only
entitled to 3. Odds are though, it would probably never come up. AlmostFree

[PaKettle]

Hate to break the bad news on the above posts that seem to be saying you can claim as many exemptions as you want on your W-4. Your maximun # of exemptions cannot exceed the # you are legally entitled. The IRS does not want people intentionally under withholding and then never file a tax return or never pay the taxes.

There is a $500 civil fine for a false W-4. Also, a criminal offense of a $1000 fine and (or) a year in prison. Almost Free

If that is true, then the IRS would not have a calculator on their own web site? (though it is temporarily down for repairs; but see the link in an above reply)

I believe you are mistaken.

[Cali]

If that is true, then the IRS would not have a calculator on their own web site? (though it is temporarily down for repairs; but see the link in an above reply)

I believe you are mistaken.

Exactly, why I posted the link.