Should I update my W-4 form?

Question

On the W-4 forms it states that if you have more than 1 job you should have all your deductions be taken out of your highest paid job and 0 for the other jobs. So i claimed 1 for my highest paid job and 0 for my other part time job. Well i recently quit my other part time job and now only have that higher paying job that I claimed 1 on. I'm not married, don't have any kids, and no one can claim me as a dependant. Should I request to change my W-4 to 0 ? Or should i leave it at 1?

I just don't want to have to owe or pay anything to the IRS the next year!

Answer 1

You can leave it at 1.  You might even be able to raise it to 2.  The instructions for the W-4 say that you can claim 1 for yourself IF NO ONE ELSE CAN CLAIM YOU plus 1 if you are single AND have only one job.

Answer 2

you will probably be fine.  some people do claim 0 on their form

so they can get more back at the end of the year.  it is a form of

savings for those who do not have the discipline to save for a

vacation or purchase otherwise.

Answer 3

Ultimately the answer to this depends on how much you earn for the year and in some cases even with claiming 0 you may end up owing. For a free and helpful tool to complete your W-4 check out paycheckcity.com

Answer 4

There is no way for any of us to be absolutely certain as to how your actual tax liability will turn out without actually knowing all about your finances, i. e., how much you will earn this year in wages, interest income, stock dividends, etc., and whether or not you have expenditures that could qualify as a tax deduction.

Most experts will tell you that you do not want to loan money to the government, which is what you could end up doing by claiming zero exemptions.  In theory, if you claim one on your W-4, you should break out even when you go to file next year, i. e., you will not be entitled to a refund nor will you owe any additional tax.

  I would suggest that you stay with one exemption on your W-4 for the current year and see how it works out next year when you go to file.  If you find that you owe an additional amount at the time of filing, you may want to re-consider and change your W-4 to show zero exemptions, in which case in the next year when you go to file (2010), you more than likely will receive a refund.

Answer 5

Well, it depends on your salary.  I am not sure on the exact numbers, but if you make roughly less than $30,000 you are probably okay.  If you make more than that and have nothing you can itemize, you might end up owing.  Keep in mind, when you get a refund from the IRS, you are basically just allowing them to get a loan from you without interest, so I don't think it is that bad to owe them at the end of the year because that gives you more control of how to spend your money during the year instead of letting the IRS hold it.  Of course, many people are incapable of saving and are better off when the IRS holds their money.  I usually recommend people choose 1 if they do not have that high a salary, because it is the method that most accurately takes out the amount where you wont owe a lot or have a large refund, which I think is the most advantageous method.  Also, there are state taxes concerns depending on what state you live in.