Quick question about withholding on taxes

kelley198721 · February 2015

FI and I just discovered that since he started his current job (start date was November 1st, 2014) his withholding has been single 2 on federal. Single zero on state.

I told him that he should change it to single 1 on both federal and state. Neither of us have children so there are no dependents to claim. Other than ourselves. Once the change goes through, his monthly take-home pay should be higher, right? He'll be bringing in more take-home pay.

At least, that's my understanding. Please correct me if I'm wrong.

noffgurl · February 2015

How you have your withholdings depends how you want your refund or lack thereof to happen. If he claims 0 more will be taken from each check and he will get a bigger refund. If he claims 1 he will have a bigger paycheck but a smaller refund.

kelley198721 · February 2015

Right but I'm asking if going from claiming 2 to claiming 1 will result in a bigger paycheck each month.

noffgurl · February 2015

Yes

kelley198721 · February 2015

Ok thanks. Sorry, sometimes I get a little confused when it comes to taxes.

formerlyGDaisy09 · February 2015

kelley198721 said:
Right but I'm asking if going from claiming 2 to claiming 1 will result in a bigger paycheck each month.

I think the answer is no. if you go from claiming 2 exemtions to claiming 1 the paycheck will be smaller.

kelley198721 · February 2015

Ah. But he can't keep claiming 2, right? It'd be illegal, I think.

AprilZ81 · February 2015

You can claim 100 if you want, you just have to be prepared to pay the IRS by April 15th.

If his tax returns have been fairly large then I would INCREASE the exemptions and aim to get your refund as close to $0.00 as possible.

If the refunds are small then I would leave them as they are.

hoffse · February 2015

AprilZ81 said:
You can claim 100 if you want, you just have to be prepared to pay the IRS by April 15th.

If his tax returns have been fairly large then I would INCREASE the exemptions and aim to get your refund as close to $0.00 as possible.

If the refunds are small then I would leave them as they are.

This.

Although we did have a client once who had an employee that tried to claim 50 exemptions. It was so weird that we ended up looking into it.

In theory, though, you can claim however many you want. It doesn't have to match how you file. Plenty of people claim more or fewer on their withholdings than they claim on their tax return (H and I certainly claim different things). A lot of it depends on what other deductions you get, so as long as it's not weird (like 50), it's really not a problem.

You really want to get it as close to $0 as possible. I would honestly rather owe a little than get refunded a little. However, during years when big things happen (marriage, birth, buying a house, etc.) sometimes it's hard to withhold correctly. We ended up with a pretty big refund this year because H had a partial year of work - but they withheld as though he was working the full year -and we bought a house. 2015 should be much closer to $0 for us.

**None of this is tax advice

kelley198721 · February 2015

Well crap. I was excited thinking his monthly paychecks would be higher. Oh well. Hopefully they won't decrease too much.

Btw we found a nice, decent one bedroom apartment that will be perfect for us! We haven't applied yet and won't until this summer but I am super excited. They have a one bedroom available in April for $810 BUT since FI works in law enforcement, we get a 20% discount on rent! So assuming that prices will stay around $810, we could be renting a nice one bedroom for $648!!

I just hope prices won't go up too much when we're ready to apply. The leasing agent told us that prices will go up a little bit as it gets closer to summer. But even if it does, rent for us should still be under $700 or close to it

I am very happy. Oh and about his computer desk, we will just shove it into a corner somewhere in the living room. We decided that it wasn't worth it to spend the money on a two bedroom just for his computer desk.

Erikan73 · February 2015

You might balance out because you said he was going to change state from single 0 to single 1, that would mean less money withheld for state taxes. So that might help off set some changing his federal from single 2 to single 1. Try it for a paycheck or two & see what happens. Just don't make any plans for any of the money until you see what happens.

jtmh2012 · February 2015

Try this:
http://www.irs.gov/Individuals/IRS-Withholding-Calculator

short+sassy · February 2015

kelley198721 said:
Well crap. I was excited thinking his monthly paychecks would be higher. Oh well. Hopefully they won't decrease too much.

Btw we found a nice, decent one bedroom apartment that will be perfect for us! We haven't applied yet and won't until this summer but I am super excited. They have a one bedroom available in April for $810 BUT since FI works in law enforcement, we get a 20% discount on rent! So assuming that prices will stay around $810, we could be renting a nice one bedroom for $648!!

I just hope prices won't go up too much when we're ready to apply. The leasing agent told us that prices will go up a little bit as it gets closer to summer. But even if it does, rent for us should still be under $700 or close to it

I am very happy. Oh and about his computer desk, we will just shove it into a corner somewhere in the living room. We decided that it wasn't worth it to spend the money on a two bedroom just for his computer desk.

Oh, that sounds great! I know from your other post you had been budgeting for the $810/month on rent. That will give you all an extra $100-$150, depending on if rent goes up a bit by April. A 20% discount is such a nice perk!

I never thought about it (I own a duplex and rent out the other side), but I would TOTALLY give a discount to a police officer. Especially if he/she brought their police car home at night. I mean, what criminal is going to want to commit a crime on a block with a police car sitting on it? That would be sweet.

And, yeah, take-home would go down for dropping federal from 2 to 1, but up for upping state from 0 to 1. It probably ends up being a wash or maybe the take-home still goes down some, just because it seems like federal withholding is usually more than most states' withholding.

hoffse · February 2015

kelley198721 said:
Well crap. I was excited thinking his monthly paychecks would be higher. Oh well. Hopefully they won't decrease too much.

Btw we found a nice, decent one bedroom apartment that will be perfect for us! We haven't applied yet and won't until this summer but I am super excited. They have a one bedroom available in April for $810 BUT since FI works in law enforcement, we get a 20% discount on rent! So assuming that prices will stay around $810, we could be renting a nice one bedroom for $648!!

I just hope prices won't go up too much when we're ready to apply. The leasing agent told us that prices will go up a little bit as it gets closer to summer. But even if it does, rent for us should still be under $700 or close to it

I am very happy. Oh and about his computer desk, we will just shove it into a corner somewhere in the living room. We decided that it wasn't worth it to spend the money on a two bedroom just for his computer desk.

Here's an idea - would this apartment complex be willing to allow you guys to live rent-free as long as your H was willing to be on call for complaints after-hours (assuming he was off-duty)? We had two police officers in our last apartment building that had that gig. It was a pretty sweet deal, because most of the people who lived there were professionals. Raging parties were totally out of the norm. I think most of us tried not to disturb the officers unless the problem was something verifiable and incredibly obnoxious.

It might be worth asking about. Providing rent-free housing to an off-duty officer is pretty cheap security from the apartment's standpoint, and it would be amazing for your budget.

hoffse · February 2015

hoffse said:

kelley198721 said:
Well crap. I was excited thinking his monthly paychecks would be higher. Oh well. Hopefully they won't decrease too much.

Btw we found a nice, decent one bedroom apartment that will be perfect for us! We haven't applied yet and won't until this summer but I am super excited. They have a one bedroom available in April for $810 BUT since FI works in law enforcement, we get a 20% discount on rent! So assuming that prices will stay around $810, we could be renting a nice one bedroom for $648!!

I just hope prices won't go up too much when we're ready to apply. The leasing agent told us that prices will go up a little bit as it gets closer to summer. But even if it does, rent for us should still be under $700 or close to it

I am very happy. Oh and about his computer desk, we will just shove it into a corner somewhere in the living room. We decided that it wasn't worth it to spend the money on a two bedroom just for his computer desk.
Here's an idea - would this apartment complex be willing to allow you guys to live rent-free as long as your H was willing to be on call for complaints after-hours (assuming he was off-duty)? We had two police officers in our last apartment building that had that gig. It was a pretty sweet deal, because most of the people who lived there were professionals. Raging parties were totally out of the norm. I think most of us tried not to disturb the officers unless the problem was something verifiable and incredibly obnoxious.

It might be worth asking about. Providing rent-free housing to an off-duty officer is pretty cheap security from the apartment's standpoint, and it would be amazing for your budget.

I will also add that this was a selling point to me, because I was on my own for a couple years while H was finishing law school in a different state. My parents, my H, and I all felt very good about the apartment complex I chose, because we knew that there were police officers on call in each building in case of a true emergency. Frankly, I was willing to pay a higher rent for it.

kelley198721 · February 2015

That sounds awesome but I ran the idea past my FI and he said it wouldn't work. Even though he is a POST certified corrections officer, he is not mandated. Which basically means he does not have the power to arrest people.

But maybe someday! FI's goal is to get out of corrections and become a police officer so if we are still living in an apartment at that time, we shall certainly try your idea!

Quick question about withholding on taxes

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