What number should I claim on w4?

Question

Instead of getting a "refund" when I file taxes, I'd rather have my money up front. In fact, if I end up owing a little at the end of the year (say under 300), that's actually fine too. Here's my info: I close on my first house tomorrow, I plan to utilize the 7500 tax "credit" - (i do realize this is actually a loan, but it's low/no interest, so I don't care.), I am single, make 40,000 a year. Plan to itemize PMI and property taxes when I file next year. I just increased my withholdings from 1 to 3. What will this do for me?

Answer 1

This change will probably increase your paycheck by around $20 a week.  You'll still have a huge refund with the $7500 "credit" for this next year.

Answer 2

It depends because every employer uses different payroll software.  My tax adviser told me it is best to just keep fine tuning it every year, by just keep increasing (or decreasing) your exemptions by 1.  I had the same problem you did 2-3 years ago but I kept fine tuning it.  In fact, I still am trying to get my local just right.  I think I have 2 state exemptions and 5 federal now and it should allow me to get just a little back.

Answer 3

Not much.  Use www.paycheckcity.com to fine tune your changes.

It's not a good idea to aim for owing $300--too many things can go wrong.