Under what conditions are you considered having no tax liability?

Question

I'm an intern this summer and will make around $9000 before tax. It will be my only income for the year. I want to know if I can claim EXEMPT on the W-4.

Answer 1

You're going to have to pay tax so long as you have income above $8,000 and are in the single tax category. Also, in the event the government keeps throwing away money in the form of "stimulus checks", you'll want to have a return on file so that you receive one (unless you're a dependent on someone else's return - they'll get it). A 1040-EZ is no big deal and any decent tax preparer can get it filed in a few minutes.

Answer 2

you still will have a tax liability on your return given your don't have any other deductions. if nobody is claiming you as a dependent you will be paying tax from the difference between 9000 and 8450. you can put EXEMPT on your W-4 but you will not be getting any refund.

Answer 3

Nope, whether you are a dependent or not, you'll be over the limit to have not owe ANY tax on your income.  So you aren't allowed to claim exempt.

Answer 4

Per the IRS, you can claim EXEMPT if your total income for 2008 is less than $10,300.

Answer 5

Nope.  It is likely that you will be claimed as a dependent on someone else's tax return.  Therefore, you will only be allowed to claim the standard deduction of $5450 on your tax return.  This will leave you with a tax liability of about $355.

If you do claim Exempt on your W-4, you will have to pay the IRS when you file your 2008 taxes.

You can probably claim Single 1 or 2.  If you claim 1, you should get a small refund.  If you claim 2, you should have a small tax liability.  It should be less than $355 though.

Answer 6

You can only claim exempt on your W-4 if you had $0 tax liability last year and expect to have $0 tax liability this year.  You cannot expect to have a $0 tax liability this year so do NOT claim exempt.

Your tax liability in simple terms is how much tax you pay for the year.  Given your income and assuming you are filing as single with no dependents, you will have a tax liability.

$9000     income

($3500)    personal exemption (assuming nobody can claim you)

($5450)    standard deduction for a single person

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$ 50   - your tax liability, which is greater than zero

In other words, you will pay tax on only $50 of your income, but since $50 is greater than $0, you cannot declare yourself exempt.

Answer 7

realistically you will probably not have any tax liability, but you dont know that yet. So you shouldnt claim exempt.  just fill out the w4 by answering the simple questions.  then if you overpay you will get a refund when you file your taxes.