Single, filing self as dependent on paycheck...need advice

nita1950July 30, 2003

I have a relative that has just gotten a job and wants to know whether to file 0 dependents or not. She is concerned about having to pay taxes at the end of the year, but could really use the extra money in her paycheck now if she claims herself. Is the difference in the paycheck going to be that much if she doesn't claim herself now? How is this determined? She will only be making around $7.50 an hour...full-time. She lives in Virginia if that makes any difference in the tax laws.

I was unable to help her as I have never claimed dependents except during tax time....and fortunately have never had to pay back taxes either in my entire working career of 30 years.

Thanks for any advice.

I posted a similar question on the Kitchen Table as I need speedy responses. Hope that this is acceptable.

Nita

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Billl

Claiming dependants means the tax you at a lower rate now because they anticipate you will be claiming dependants for a deduction on your end of year filing. The company projects earnings and then forecasts the rate at which money will need to be withheld to meet the total tax burden. The way people generally end up owing big money is if they claim more dependants on the paperwork with the company than they will at the end of the year. Lots of people claim less dependants for the withholding than they plan to on their tax returns so that they are basically guaranteed a refund. That seems to be what you have done.

Did your relative have a job prior to this? If not, a $7.50/hr job for half a year is going to put her around $7,000 - right around the single deduction on a 1040-ez. That means she will have virtually zero federal tax liability.

If she is married, has kids or has another source of income this fiscal year, I'd print of the applicable tax forms and plug in some projected numbers.

    Bookmark   July 31, 2003 at 9:58AM
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nita1950

Hi Bill. Yes, she did have a part-time job prior to getting the full-time job.(She's working out her two week's notice now, so the part-time job will be over with soon. At that job, she claimed no dependents.) She is also single and has no children. She told me that she's okay with the idea of not getting a tax refund, she's just worried about the amount she will owe (or curious if she will have to pay anything at all.) Thanks for the info! :)

Nita

    Bookmark   July 31, 2003 at 7:32PM
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windchime

If she has any other deductions or credits, like interest on a mortgage (for the home where she lives,) real estate taxes (for the home where she lives,) interest on student loans, college tuition paid this year, etc, then she MAY be okay to claim a dependent now, and still break even at the end. It all depends.... If she's going to have a baby this year, then she can begin claiming that dependent now.

    Bookmark   August 5, 2003 at 4:48PM
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