Here is a thought. When I was 16, my father taught me a valuable lesson and I didn't even know it. He taught me how to fill out my W4 for my future. On line 6 of your W4 it asks how much money you want taken out each paycheck. He advised me to figure 10-15% of the paycheck and put that amount on that line. At the end of the year, you get it all back, PLUS what you get back in the first place. He advised me to put half into a mutual fund half into an IRA with the direct deposit info on the tax forms and forget about it!! I never knew any other way of doing things. Just imagine what that mutual fund/IRA is worth now.........35 years later at at average of about 12% interest. Need I say more?? Thanks Dad!! One could do the same with just a IRA with $1500 a year for 40 years. I will almost guarantee your tax returns alone would cover this amount. Add in the tax credit for having kids and BINGO!!!! All you do is set up an IRA for your kids starting at birth and add the Govt. child tax credit money which is FREE each year......when they turn 16, they take over payments into the account. They will be a millionaire by 30 or so if they play their cards right!! Should they also, instead of putting the other half into a mutual fund, open another IRA, they will be a millionairre again by the time they are about 56. The best kicker, since you "gifted" the tax credit to their account, it becomes a tax deduction to you the next year!!
Oregon's Lonewolf could I potentially get in contact with you to get a tiny bit more of info from what you just said please? I’d greatly appreciate it.
I personally prefer the big refund. The very small amount of interest I miss out on is negligible to me. I also do the 52 week *and* 365 day challenge. I love the massive lump sum I get from both a big tax return and the little money saving games I like to play.
Falco: that is short term thinking. Yes, it is a small amount of interest, but if you get a big refund and you blow it all away that is a huge loss. Or if you invest the huge refund then you are behind with 12 months of interest (well... it's not that simple but I hope you get it). Just like BeatTheBush said, it all comes down to willpower. You know how I don't have a mortgage? Because I rented a place for a really long time. People kept telling me that I should get a mortgage, at least that way I am spending the money on my own place and not giving it to a random guy. And people are still paying their mortgages but I already live in my own place that I bought in one large cash transfer. I should add that I live in a poor country where you can find cheap rents for less than half of what mortgages are - so you may not be able to do the same in the US but my point is that you should always think in long term; what is the most beneficial in long term. In my case all those years of rent was a lot less than paying for the apartment two and a half times over to a bank.
Merrysoul R as of 2/25/2018 the IRS withholding calculator is currently unavailable. The IRS will update the calculator as soon as updated withholding information is available :(
After a succession of payouts from Alex Paton, its safe to say that this fellow is legitimate. I don't have any doubts moving forward, he even turned down my gift token and asked me to give it to charity saying 'God has given me all that i need, be his vessel and help those who are less fortunate.
I invite newbies and regular traders to join him, he’s taking in new investors. If you have further questions about how it works, you can... AlexPatontrades (a) g ma il. c om ... Or... (32) -460-219-701 Talk to Paton directly on wa(t)sapp and get the help you need.
The importance of diversifying one’s portfolio is very underestimated, having different streams of income can only save you from recession and trading is a goldmine with few miners.
From my experience as an investor and trader, it can only get difficult when you are not in the right place of with the right person. An expert trader is best adviced for maximum results.
Some people use it like a savings account they can't touch for a year. I know you don't receive interest, but it beats dipping your hand in the cookie jar all year.
So your paying to not have all of your money is what ur doing because ur not earning the intrest which means ur paying someone to stop you from using YOUR money. Good luck with that, wont get very far LOL
@@allanosmond1 correct me if im wrong but you would only get 10$ - $30 in interest? that is not enough money for me to try to tinker with my w4. if i edit my w4 incorrectly, i could end up paying a larger tax bill than i thought i would have. i prefer not to claim anything on my w4 and pocket 2k at the end of the year. if you told me i would pocket hundreds by claiming more on my w4 i would definitely do it --but 10 - 30$ in interest is nothing. not worth the trouble.
When I first started in the tax business, I used to tell my clients that receiving a refund was not a good thing. I soon found out that most people think differently and that if I continue to push this ideology, I won't grow my client-base and won't be popular.
W4 is the form you fill out, so they know how much estimated taxes to take from youW2 is the form you get at the end of the year and use it to file your taxes, it shows how much you earned and taxes paid1099 is the form that shows the income earned for contract work, from a company or even other self-employed person. Its kind of like w2, but they usually don't take tax out right away, but you can pay quarterly estimated tax if you think you would owe too much at the end of the year.It is so simple, I thought everybody knows that.
My frugal life thanks, can one work under 1099 on any job, or only specific jobs ? If an employer gives me to fill out the w2 form can i request a 1099 instead ?
I'm not sure I understand. I was disappointed when you said you weren't going to go through the form. As a single full time worker with no dependants, I put 1. Are you suggesting we lie and increase the number to adjust how much we pay?
+Valkyrion19 Of course you should not lie. You can increase it legally. Particularly if you have other types of deductions, this can increase your exemptions.
A Enter “1” for yourself if no one else can claim you as a dependent . . . . . . . . . . . . . . . . . . B Enter “1” if: • You’re single and have only one job; or • You’re married, have only one job, and your spouse doesn’t work; or . . . • Your wages from a second job or your spouse’s wages (or the total of both) are $1,500 or less. } C Enter “1” for your spouse. But, you may choose to enter “-0-” if you are married and have either a working spouse or more than one job. (Entering “-0-” may help you avoid having too little tax withheld.) . . . . . . . . . . . . . . D Enter number of dependents (other than your spouse or yourself) you will claim on your tax return . . . . . . . . Form W-4 - You may enter 5, maybe 6
BeatTheBush I am married, my spouse doesn’t work, and we have a 3 month old baby. How should I fill out my W-4 so I can get as many exemptions as legally possible???
Would have been better if you explained what you actually personally put down as exemptions. How many exemptions do you claim and which ones. A lot of us are single and it is relative.
I understand your point. I did add a whole bunch of exemptions myself from mortgage interest deductions. Don't forget other deductions such as charitable contributions, state and local taxes, medical expenses in excess of 10% of your income, and others.
Hey can you do a video on how to set the exemptions as close to perfect as possible? Or even just a general video with tips to set them correctly? thank you for the great material!!
I like to give the government a free loan all day!! Like you said, some ppl are bad with saving and i rather not guess on taxes. Most people are literally playing with the numbers on the W2 and hope for the best. I like to spend less during the year and have another savings account in the form of a tax return.
4:00, "very little [few] people are exempt from paying taxes" Actually, it is closer to 45% of American households that do not pay income taxes. (Interestingly enough, the split is also 50/50 population wise) A large percentage of those people actually get money from the government. This according to the Tax Policy Center and Pew.
I may change how I do things with more time and a higher income, but right now I just use it as a mandatory savings for myself. I do not think about it during the year, and then I have some working capital all at once later. I intentionally want to pay at least a little bit over because I do not ever want to owe at the end of the year, and I am not familiar enough with taxes yet to know exactly what I should be expected to owe over the year.
For some, this is a convenient way to do things. Not everyone can try to get it to zero and save that little extra. As long as you are not getting thousands in refund, it's not too bad.
I used the refund one year to buy a gold coin and I still have the coin today. Had I did what you said I guarantee you the money would have dissolved into all the little things in life.
I usually even out, but I pay everything in advance. Most of the time I have to pay some money at the end of the year, because I'm having a Sidebusiness which makes already 5 digit profit a year (But its inconsistent).
John Holifield Yeah my accountant told me this long ago and I listened, but I still prefer at least $5k return each year. But he really can't argue with me about it because I max my Roth 401k each year(currently 1.4 million),Roth is over $500k that I max out every New Year's Day,and I save at least $2500/mo. for other savings/investments,emergency fund,etc.. Most of the returns went to mortgage principal in the beginning and part of the reason I paid off my 30yr. mortgage in 9 years. So now that I've been completely debt free for ten years the money goes into emergency and travel fund. My total emergency fund is close to $400k and travel fund is around $40k. That's why I laugh when someone tell me why I shouldn't get refunds and what I should do or shouldn't do with my money because they are always in debt,don't save/invest,and from what I'm seeing now over 50 years old and hardly anything saved for retirement.
I listened one year. I felt worse off though, I didn't have the "bonus" in April and the extra money throughout the year seemed to have dissolved into all the trivial matters. Sometimes psychology is more important than math when it comes to money.
It amazes me how some people are so happy to get a refund. I almost get close to none, if there's anything it's only like $500-$1000 and mostly because I'm a part time student.
I lost control of my life a couple years ago, but things have settled down. I've paid off my credit cards, this paycheck I'm paying off my checking's overdraft protection, and next month I'm making my last payment on my five year loan - which will give me ~ $800.00 extra every month. I was going to dump all extra money into my mortgage, but after watching your videos, I'm going to half my extra payments to my mortgage and extra to my 403b IRA so I can benefit from the compounded interest over the next 15 years before I retire. My mortgage would be paid in 9 yrs. Oh... I'm also going to see a financial advisor to see anything else I can do. Being a widower, I'm not sure what I'm going to do with all this money once I retire, but it's better to have it and not need it, then... I usually get back ~ $9,000 from taxes. I'm scared of getting penalties or thrown in jail. I understand what you're saying, but I'll need time to be confident enough to do it. I could really benefit from the compounded interest in my 403b.
Good thing to see you are tackling all that debt one at a time. Wow $9k is a lot to get back. No one will throw you in jail as long as you satisfy your obligations at the end of the year.
BeatTheBush : You're right. I'm going to half my exemptions, for both federal & state, and then I'll see where that takes me as far as tax returns. Meanwhile, I'll invest the difference before I get use to seeing it. Thank you :)
So with more exceptions I would get less income when I receive my paycheck and pay less in taxes at the end of the year. I have no dependants. How do I set up the exceptions? I normally have to pay a lot at the end of the year.
Yeah, I don't have any debt, but I can see how it would be better to take the money that would be used for a tax return and use it to pay off mortgage or a car payment.
I am not giving the gvt an interest free check. You can always open a saving along with a credit union and earn something...or CDs. You dont need to carry that card with you
so lets say your refund would be 2,500. And instead you throw that in a CD for 1 year and get 2%. I don't see much difference in getting a check from IRS for 2,500 or withdrawing a CD a year later for 2,550.
Dave Ramsey says people can put whatever number they want on their W-4 form. Many tax peeps on Reddit say one must follow the W-4 worksheet. but if people follow the worksheet then they won't be able to adjust exemptions on W-4. So What which one is it? And you didn't cover credits & deductions and other items that lower tax liability that leads to a refund. your video as is if meant for single people without dependents.
@@BeatTheBush yes, yes it's course but no one actually explains how to adjust w-4. Everyone on RUclips says to follow the w-4 guidelines or go to the IRS withholdings calculator. I think even if people are single they should put at least 2 or 3 additional withholdings even if they don't have dependents. Take more money home baby! Money rules!!! Refunds suck except EIC and CTC ODC. Those rule too!!!
Beat The Bush, I thought about doing this and I go to my H.R office and redo my W-4 and I wanted to put 4 instead of just one. When I went to turn in my W-4 the lady in H.R asked me if I claim four people on my taxes and wouldn't let me put 4 cause I would be "lying to the federal Government." Is it lying? If it is lying do they penalize you in anyway?
I think if you show them the worksheet then you will be fine. You indeed cannot lie. You do not really have 4 people but you can effectively have 4 exemptions from many other ways.
Your face around 1:30 is pretty much laughing at stupidity of people, including me. I don't mind you judging. Your videos are always worth watching because of such humour while other RUclipsrs lack it. I knew this video would be about Time value of money and interest. 🙌🏻😅
I just graduated with 150k student loan and I was basically thinking a bit differently, it being if I should hold off my stupidity till end of year where I know what I did clearly, or if I should be tiny bit stupid throughout with it and clueless at the end where the money went. 😂. For now, time to just focus on job hunt with mech e.
I guess it depends on what your interest rate is on your savings account. The major banks(most people have) offer 0.01%APY in savings, which is essential pennies. Doesn’t seem worth gettting 5 cents a month to get your money instead of a lump sum at the end of the year
You failed to talk about those that pay no taxes in but get like 4000 to 5000 back because of earned income credit with children. How do they adjust so they don't get any refunds?
Yes, you did it! See what I told you? You need my support, my friend. And I also like the idea about the Savings Account thing. Didn't thought about it like that. But I still barely understand what Exempt stands for in which person should go for that.
Thanks for your suggestion! It really depends if you are disciplined enough to not spend a larger paycheck. Exempt means exempt from paying taxes (i.e. you do not have to pay taxes). If you paid taxes last year, then you cannot say you are exempt.
+BeatTheBush I guess I'll have to talk with the recruit team cause I barely understand these things. But now I have a concern, I have a friend that does my taxes and now says that things changed for this year and people who has many credit cards hurts your credit. She wasn't talking about Hard Inquiries, but as if you are someone who possess several credit cards like yourself it hurts your score because apparently things changed on how to calculate scores this year. Do you know anything about it? I think she is confused because for me is not how many credit cards you possess but how you manage those.
If I make $100,000 a year before taxes and I file exempt for the year and I’m single. And let’s say I put aside $2500 a month in a savings account with interest so I can pay back the irs at the end of the year whatever I owe, and accumulate interest during the year at the same time. Would that be ideal or stupid?
It probably is, I only know because it happened to my buddy this year. He checked the status of the refund and it said letter pending, then a week later had an envelope from the Department of Education saying that his federal return is going towards unpaid student debt. I will forward him this video for future reference lol.
i was talking to somebody about this the other day! I want to owe taxes at the end of the year, I used my money to make money not let the gov use my money to make money.
I don't want to be underpay and get penalty after changing W4 because my income is increasing and deduction (property tax, loan interest, 401k contribution etc.) might decrease in following years, so it's hard to have a fixed number of exempt in W4. What might be the workaround for that?
If your deduction is decreasing you can always adjust your W4 accordingly to have more taken out of your paycheck. You could also make additional payments by saying so in the W4.
There are some complicated guidelines for this. Generally if you owe less than $1000 then no penalties. More rules here: www.irs.gov/taxtopics/tc300/tc306
What do you do when they are taking too much out if your paycheck? How do you adjust it on the W4. I make about 1000 a week, and more with overtime but sometimes my check is just barley 700 dollars or less if I do overtime. It's a ridiculous amount of money coming out. How do I stop this? I'll get like an 800 dollar refund. I have no children no special circumstances
You can adjust the W4 to increase the exemptions. But you might go over. In this case you can compensate by putting a dollar amount of deduction in addition to the exemption amount.
(Sorry to butt in here) Is it too late now to adjust our W4s? I think I've always had mine at 0 (nobody ever really explained any of this to me). I'm married but we file separately because he's on disability. I got about $2,000 back, so obviously that's not a good thing... I would definitely like to have money I can put in my savings account to get interest.
No, it is not to late to change or adjust your W-4 Form. You may change whenever you want and as often as you need to. IIRC I was able to do it online at my employer's "human resources" website
That is actually a perfect explanation. Also those who like to get a refund in the end of a year have to consider a USD inflation rate which is about 2%. So instead of making money out of those that were not spent on taxes (buying stocks, cryptocurrencies, etc.) a person will receive, for example $2000 in the end of the year, which were actually $2040 in the beginning of the previous year.
$10. I'd say not worth even filing the W-4 let alone the risk you might blow the money. If interest rates go back to where they were in the 1980s that might be different!
I used to go the first 6 months with 10 kids and then the next 6 months I would give them up for adoption. I would keep most of my money during the year and get a small refund.
whatever percentage interest gained on savings instead of a tax refund will barely buy you a meal at McDonalds. Either way you do it, you're not going to see any large boost in savings.
I mean I understand the point of your video, but to say that tax refunds are bad over a possible $15 dollar loss is a stretch. I enjoy most of your videos as I am a penny pincher as well.
Why are you suggesting a 1.5% savings account, instead of adding it to a higher return investment? 10% per year is a lot more than 1.5%. Though if you're putting in money monthly, the interest is only the full percentage for the portion invested in January, for 12 months. The other investment amounts are only there for 11 months, 10, 9, 8...
Sounds like you can’t owe them too much or there is a penalty? And conversely, I thought I heard that you do get extra, above what you would have got otherwise, if you paid in more than you owe. Thoughts?
Now that you explain it that way, wouldn't it be smarter to not pay any taxes throughout the year, then pay a big tax bill at the start of the year. This way, all that money could have been earning interest year round ?
No it wouldn't because if you owe significant taxes, you will be charged a penalty by the IRS negating any interest you would earn. Plus, I'm not a big fan of sloshing money around and then you'd worry about having enough cash at the end to pay a huge tax bill all at once.
The number to get as close to zero as you can without paying taxes will depend on your deductions and pay. So I would just work out the number on the form where you can factor the tax credits you will be getting.
On the w4 there is an "additional withholdings" line near the bottom. I tried to put a negative number in there, and my HR called me and said they can't do that :(
LOL! =D =D =D -$1,000,000 LOL! If you add in "qualifying home mortgage interest, charitable contributions, state and local taxes, medical expenses in excess of 10% of your income, and miscellaneous deductions", you might be able to up your exemptions.
i wanted to do the math and see if the opportunity cost would pay the extra fee. Or pay them every 3 months as a self employed person would. I believe that keeps the fees out of the question.
Hi I single and I pay for rent 1000 every months.my paycheck is 1150 and but I revive just 900 every paycheck .so I give the government every month about 500$ and I have debit and credit card .I pay all my pills so I won ask. How do you think tax refund I get in the end of the year.thanks
Forget the tax refund. You really should try to get your rent lower. $1000 is a huge portion of your pay. Is there anyway to live with roommates and get it lower for yourself?
Do you think it’s wrong to increase my exemptions from 1 to say 3 or 4, even though I’m single with no dependents. I really don’t mind owning the irs a bill. I’ve always entered “1” in prior years W4s and I still end up with a refund. I make ~$135k and max out my 401k account.
if you make 135k a year, you can easily knock that 6 figure loan. You just have to be willing to live very minimalistic for a while. I make almost 6 figures and live like I only make 30k, and me and wifey are happy. I paid off her 40k of loans in less than a year and we save enough to travel few times a year.
You would decrease the number so that they withhold more taxes. Then you will get a bigger refund. Of course, you cannot just adjust the number, you have to go through the W4 worksheet.
You can thank Milton Friedman for this. He thought people would be more opposed to taxation if they were withheld. Instead it makes people more compliant so they get their refund
BeatTheBush it's brilliant in a way for that purpose. Considering how many people don't deduct correctly and how many would not file of not for the promise of a refund. But it ought to be repealed. And while we're here, the tax simplified so you don't need to hire someone.
Wow thanks for video didn't know this!! Let me ask a question I have a job that makes extra money in winter for 3 months and I'm almost positive I've been paying insane extra taxes during those bigger check weeks is there a way to take advantage of this with taxes or pretax accounts etc? Hope I asked it properly if I didn't I'll respond again! Thx
+S D You can adjust your exemptions to reflect your full year income. If you're getting a really large refund you might need to increase your exemptions. Generally too much work to adjust this stuff on a per month basis.
BeatTheBush o no I will talk to my tax guy and adjust myself from a 1 to a 2/5 to lower my April tax return id rather have more money all year round to spend:invest! I was referring to a 401/ira pretax account to hide away some pretax money if say for 3 months my checks are much bigger then normal i feel my taxes go up because it's lots of overtime but it's so hard trying to figure that part out. Does my second question make sense now?
Yeah, no!!! I always owe!!! When I get money back, it's mine!!! Why not just invest it??? I went through a divorce and I pay child support so when I was in arrears they took whatever I had. Didn't really mind cause it got me caught up. However, I also had to o give up half of my 401K so whatever money I can get I put back into saving for my retirement. I understand your theory but it's just not feasible for everyone. Especially if you have debt and low income jobs. Just my opinion.
I put this year that I have 3 dependents but I really have none. I'm scared and lose sleep some nights...especially knowing that tax season is just around the corner. I want to change it back to zero dependents but I wonder...what will happen to me? Will I be in big trouble with the IRS? Or will I just have to pay back the money?
Don't be too worried about that for your number of exemptions claimed. Do you have other exemptions you did not account for? Worse case is just that you have to pay taxes and possibly a penalty. If you got a huge refund last year, you might just get something a lot smaller this year. It really depends.
I didnt get anything big last year. I got maybe a 1500 or 1200 dollar refund. It was regular or below average. Also, I am currently in Texas and they don't have a state income tax so I am thankful, but yeah the Federal still takes money out of you wherever you go. So should I still be worried? Well maybe I could put in the moving expenses? how about the a new laptop I just got?
Hmmm I think you might owe taxes because 3 exemption might put you at reducing the amount you pay per year by about $3000. This is a really rough guess of course. So you will do well changing it to 0 or 1 for the rest of the year.
I work for the IRS and we advise people to only have as much taken out as to not owe. problem is people either don't have enough and relying on a tax preparer (HORRIBLE MISTAKE) or too much so they HAVE to rely on refund to sustain them. Sad really
Not owing is the key of course or else there is a penalty. Purposely getting a refund does cost the person slightly in terms of opportunity cost. It matters to those who are trying to squeeze every dime out of their cash flow.
You do the calculations on the form and then you write a final number down. Then you turn that form into your employer. ruclips.net/video/c_1DifHtUWA/видео.html
It depends on your tax bracket. Reducing exemptions increases your taxable amount. So if your tax is in the 25% bracket. 1 to 0 change will increase your taxable income by $4150. Or increase your tax bill by $1037 or make your paycheck go down by $86 a month.
iv told people this and they don't understand my way of thinking . for example i make about 23,000 gross and walk away with maby 15,000 a year now I get 90% back . that did nothing for my money it sat in the governments hands for a long time and gave it back when they got done
BeatTheBush I am a full time student and work part time ..I made around $15000 ..This year gonna be my first Tax on my own ..Every time I see my pay check gross pay is like 630 and I got only 490 ...when it is 550 I got about 420 ..and the paid is weekly ..so my average tax deduction is about 300 to 400 .so I am hoping to get more ..and How to not get tax return and make pay check a lit more bigger ?
BeatTheBush so will i have to talk to my Human Resources to do this? i really hate overpaying but don't know how to fix it so i dont owe or overpay please halp
Here is a thought. When I was 16, my father taught me a valuable lesson and I didn't even know it. He taught me how to fill out my W4 for my future. On line 6 of your W4 it asks how much money you want taken out each paycheck. He advised me to figure 10-15% of the paycheck and put that amount on that line. At the end of the year, you get it all back, PLUS what you get back in the first place. He advised me to put half into a mutual fund half into an IRA with the direct deposit info on the tax forms and forget about it!! I never knew any other way of doing things. Just imagine what that mutual fund/IRA is worth now.........35 years later at at average of about 12% interest. Need I say more?? Thanks Dad!! One could do the same with just a IRA with $1500 a year for 40 years. I will almost guarantee your tax returns alone would cover this amount. Add in the tax credit for having kids and BINGO!!!! All you do is set up an IRA for your kids starting at birth and add the Govt. child tax credit money which is FREE each year......when they turn 16, they take over payments into the account. They will be a millionaire by 30 or so if they play their cards right!! Should they also, instead of putting the other half into a mutual fund, open another IRA, they will be a millionairre again by the time they are about 56. The best kicker, since you "gifted" the tax credit to their account, it becomes a tax deduction to you the next year!!
The bottom line is you don't have to be absolutely perfect. Just make it good enough. Your way is just fine.
Oregon's Lonewolf could I potentially get in contact with you to get a tiny bit more of info from what you just said please? I’d greatly appreciate it.
I know literally nothing about taxes so this entire paragraph just confused tf out of me but imma still screenshot it
Would you be willing to make a video about this going more in depth about your experience?
And what happens if a major war breaks out or the stock markets crash?
It amazes me how many people that don't know this.
And even after the explanation, many people prefer a big refund.
BUCKTHEWORD14 sadly this was not taught in school nor any of my family understand taxes including myself.
I personally prefer the big refund. The very small amount of interest I miss out on is negligible to me. I also do the 52 week *and* 365 day challenge. I love the massive lump sum I get from both a big tax return and the little money saving games I like to play.
Falco: that is short term thinking. Yes, it is a small amount of interest, but if you get a big refund and you blow it all away that is a huge loss. Or if you invest the huge refund then you are behind with 12 months of interest (well... it's not that simple but I hope you get it).
Just like BeatTheBush said, it all comes down to willpower. You know how I don't have a mortgage? Because I rented a place for a really long time. People kept telling me that I should get a mortgage, at least that way I am spending the money on my own place and not giving it to a random guy. And people are still paying their mortgages but I already live in my own place that I bought in one large cash transfer. I should add that I live in a poor country where you can find cheap rents for less than half of what mortgages are - so you may not be able to do the same in the US but my point is that you should always think in long term; what is the most beneficial in long term. In my case all those years of rent was a lot less than paying for the apartment two and a half times over to a bank.
*It amazes me how many people don't know this
IRS has an easy to use withholding calculator on their website. With a correctly set W4, I usually end up paying only $20 back.
=D
Merrysoul R I am about to look this up. Thanks🤗🤗🤗
Merrysoul R as of 2/25/2018 the IRS withholding calculator is currently unavailable. The IRS will update the calculator as soon as updated withholding information is available :(
Nice job Merry! That's pretty much a perfect return!
with me since i am single i usually claim eempt or 0 or 1?
i will never look at my returns the same way again *_*
=D I like this.
After a succession of payouts from Alex Paton, its safe to say that this fellow is legitimate. I don't have any doubts moving forward, he even turned down my gift token and asked me to give it to charity saying 'God has given me all that i need, be his vessel and help those who are less fortunate.
I invite newbies and regular traders to join him, he’s taking in new investors. If you have further questions about how it works, you can... AlexPatontrades (a) g ma il. c om ... Or... (32) -460-219-701 Talk to Paton directly on wa(t)sapp and get the help you need.
Thanks for the recommendation and help directing me to Paton.
Investing with him has been a great pleasure for me too, he’s ever consistent.
The importance of diversifying one’s portfolio is very underestimated, having different streams of income can only save you from recession and trading is a goldmine with few miners.
From my experience as an investor and trader, it can only get difficult when you are not in the right place of with the right person. An expert trader is best adviced for maximum results.
Some people use it like a savings account they can't touch for a year. I know you don't receive interest, but it beats dipping your hand in the cookie jar all year.
Which works for some people. So adjusting your exemptions to get 0 refund only works for people who wouldn't dip their hands in the cookie jar.
BeatTheBush how do you calculate for a zero refund and zero penalty?
So your paying to not have all of your money is what ur doing because ur not earning the intrest which means ur paying someone to stop you from using YOUR money. Good luck with that, wont get very far LOL
That's just dumb and something poor people do. Why not invest that money automatically every month instead of giving the IRS an interest-free loan?
@@allanosmond1 correct me if im wrong but you would only get 10$ - $30 in interest? that is not enough money for me to try to tinker with my w4. if i edit my w4 incorrectly, i could end up paying a larger tax bill than i thought i would have. i prefer not to claim anything on my w4 and pocket 2k at the end of the year. if you told me i would pocket hundreds by claiming more on my w4 i would definitely do it --but 10 - 30$ in interest is nothing. not worth the trouble.
When I first started in the tax business, I used to tell my clients that receiving a refund was not a good thing. I soon found out that most people think differently and that if I continue to push this ideology, I won't grow my client-base and won't be popular.
I wish the man who filed our taxes at H&R block would have explained why our return was so low! I always thought a large tax refund is the goal.
jesus you don't know how much i needed this channel thank you for being here
this is such a game changer. Thank you very much for putting up this video!
Holy shit! Thank you for taking the scales off my eyes.
=D Increase those exemptions legally using that form and get a larger paycheck. =D But not too large... =D
More about taxes and different forms like w4, w2, 1099 please
Gah! Taxes are so boring! lol.
W4 is the form you fill out, so they know how much estimated taxes to take from youW2 is the form you get at the end of the year and use it to file your taxes, it shows how much you earned and taxes paid1099 is the form that shows the income earned for contract work, from a company or even other self-employed person. Its kind of like w2, but they usually don't take tax out right away, but you can pay quarterly estimated tax if you think you would owe too much at the end of the year.It is so simple, I thought everybody knows that.
anything that deals with numbers and money is not boring to me lol.
My frugal life thanks, can one work under 1099 on any job, or only specific jobs ? If an employer gives me to fill out the w2 form can i request a 1099 instead ?
1099 is the form you fill out to file taxes.
I'm not sure I understand. I was disappointed when you said you weren't going to go through the form. As a single full time worker with no dependants, I put 1. Are you suggesting we lie and increase the number to adjust how much we pay?
+Valkyrion19 Of course you should not lie. You can increase it legally. Particularly if you have other types of deductions, this can increase your exemptions.
archstanton n
BeatTheBush a house is a deduction, dependents, so I have 3 kids, a wife, a house, I can legally claim 5?
A Enter “1” for yourself if no one else can claim you as a dependent . . . . . . . . . . . . . . . . . .
B Enter “1” if:
• You’re single and have only one job; or
• You’re married, have only one job, and your spouse doesn’t work; or . . .
• Your wages from a second job or your spouse’s wages (or the total of both) are $1,500 or less. }
C Enter “1” for your spouse. But, you may choose to enter “-0-” if you are married and have either a working spouse or more
than one job. (Entering “-0-” may help you avoid having too little tax withheld.) . . . . . . . . . . . . . .
D Enter number of dependents (other than your spouse or yourself) you will claim on your tax return . . . . . . . .
Form W-4 - You may enter 5, maybe 6
BeatTheBush I am married, my spouse doesn’t work, and we have a 3 month old baby.
How should I fill out my W-4 so I can get as many exemptions as legally possible???
Because of what I have learned from you I have managed to save 80% of my income. Now I am going to apply what I have learned from this video.
Serious!? Man... 80% is a darn great point to live at. What percent did you start with?
I never kept track. Reckless living!
If you sacrifice and have knowledge of your resources its possible!
So far I'm saving like 20% lol, great advice. Before i was saving nothing. I was always negative lol
Would have been better if you explained what you actually personally put down as exemptions. How many exemptions do you claim and which ones. A lot of us are single and it is relative.
I understand your point. I did add a whole bunch of exemptions myself from mortgage interest deductions. Don't forget other deductions such as charitable contributions, state and local taxes, medical expenses in excess of 10% of your income, and others.
my dad is a tax expert and this advice is spot on. great work!
Yay! I am not a tax expert however, I just manage my own finances.
Hey can you do a video on how to set the exemptions as close to perfect as possible? Or even just a general video with tips to set them correctly? thank you for the great material!!
There has been requests on that. It seems like a tutorial on it would be useful. Noted. =D
thank you! :D
I like to give the government a free loan all day!! Like you said, some ppl are bad with saving and i rather not guess on taxes. Most people are literally playing with the numbers on the W2 and hope for the best. I like to spend less during the year and have another savings account in the form of a tax return.
Why not just set up automatic allotments on pay day?
@@drewpierpont3361 A fool and his money are soon parted.
This is the best financial channel because it's actually useful
4:00, "very little [few] people are exempt from paying taxes"
Actually, it is closer to 45% of American households that do not pay income taxes. (Interestingly enough, the split is also 50/50 population wise)
A large percentage of those people actually get money from the government.
This according to the Tax Policy Center and Pew.
Ahhh... you're talking about people who do not earn much at all. Sure. =D
I may change how I do things with more time and a higher income, but right now I just use it as a mandatory savings for myself. I do not think about it during the year, and then I have some working capital all at once later. I intentionally want to pay at least a little bit over because I do not ever want to owe at the end of the year, and I am not familiar enough with taxes yet to know exactly what I should be expected to owe over the year.
For some, this is a convenient way to do things. Not everyone can try to get it to zero and save that little extra. As long as you are not getting thousands in refund, it's not too bad.
I used the refund one year to buy a gold coin and I still have the coin today. Had I did what you said I guarantee you the money would have dissolved into all the little things in life.
I usually even out, but I pay everything in advance.
Most of the time I have to pay some money at the end of the year, because I'm having a Sidebusiness which makes already 5 digit profit a year (But its inconsistent).
+Thomas Brandon Kovacs Sounds like you have things in good shape. =D
I tell my clients this constantly and only about 20 percent listen
Hmmm, people rather have a large refund I suppose, lol.
John Holifield
Yeah my accountant told me this long ago and I listened, but I still prefer at least $5k return each year.
But he really can't argue with me about it because I max my Roth 401k each year(currently 1.4 million),Roth is over $500k that I max out every New Year's Day,and I save at least $2500/mo. for other savings/investments,emergency fund,etc..
Most of the returns went to mortgage principal in the beginning and part of the reason I paid off my 30yr. mortgage in 9 years.
So now that I've been completely debt free for ten years the money goes into emergency and travel fund.
My total emergency fund is close to $400k and travel fund is around $40k.
That's why I laugh when someone tell me why I shouldn't get refunds and what I should do or shouldn't do with my money because they are always in debt,don't save/invest,and from what I'm seeing now over 50 years old and hardly anything saved for retirement.
I listened one year. I felt worse off though, I didn't have the "bonus" in April and the extra money throughout the year seemed to have dissolved into all the trivial matters. Sometimes psychology is more important than math when it comes to money.
It amazes me how some people are so happy to get a refund. I almost get close to none, if there's anything it's only like $500-$1000 and mostly because I'm a part time student.
you should really write a book. or a online guide. it would be great!
That might come out one day. =D
I lost control of my life a couple years ago, but things have settled down. I've paid off my credit cards, this paycheck I'm paying off my checking's overdraft protection, and next month I'm making my last payment on my five year loan - which will give me ~ $800.00 extra every month.
I was going to dump all extra money into my mortgage, but after watching your videos, I'm going to half my extra payments to my mortgage and extra to my 403b IRA so I can benefit from the compounded interest over the next 15 years before I retire. My mortgage would be paid in 9 yrs.
Oh... I'm also going to see a financial advisor to see anything else I can do.
Being a widower, I'm not sure what I'm going to do with all this money once I retire, but it's better to have it and not need it, then...
I usually get back ~ $9,000 from taxes. I'm scared of getting penalties or thrown in jail. I understand what you're saying, but I'll need time to be confident enough to do it. I could really benefit from the compounded interest in my 403b.
Good thing to see you are tackling all that debt one at a time. Wow $9k is a lot to get back. No one will throw you in jail as long as you satisfy your obligations at the end of the year.
BeatTheBush : You're right. I'm going to half my exemptions, for both federal & state, and then I'll see where that takes me as far as tax returns. Meanwhile, I'll invest the difference before I get use to seeing it. Thank you :)
So with more exceptions I would get less income when I receive my paycheck and pay less in taxes at the end of the year. I have no dependants. How do I set up the exceptions? I normally have to pay a lot at the end of the year.
+Miss desire Independance If you want to pay more taxes, you will lower you exemptions. You could also do a dollar amount additional payment.
haven't checked out this great video yet but you are giving out a lot of information
You should watch it!
And how do families who earn 15k - 30k a year get a 10k refund. How does this work? How do you get more in return than what you put in?
Likely through tax credits which is actual cash not just reducing your income as in tax write offs.
Yeah, I don't have any debt, but I can see how it would be better to take the money that would be used for a tax return and use it to pay off mortgage or a car payment.
You adjust the deductions so you over pay just as little as you can. You use the extra money to pay off mortgage. Always a great idea.
Why is there a penalty fee if you exempt health insurance? I don't get it..it should be a choice
I am not giving the gvt an interest free check.
You can always open a saving along with a credit union and earn something...or CDs. You dont need to carry that card with you
Right on. The right way to think about the refund.
Right on. Agreed.
so lets say your refund would be 2,500. And instead you throw that in a CD for 1 year and get 2%. I don't see much difference in getting a check from IRS for 2,500 or withdrawing a CD a year later for 2,550.
Dave Ramsey says people can put whatever number they want on their W-4 form. Many tax peeps on Reddit say one must follow the W-4 worksheet. but if people follow the worksheet then they won't be able to adjust exemptions on W-4. So What which one is it? And you didn't cover credits & deductions and other items that lower tax liability that leads to a refund. your video as is if meant for single people without dependents.
If you do not take out enough taxes, you may owe too much and have to pay a penalty on top of what you own. So do it carefully.
@@BeatTheBush yes, yes it's course but no one actually explains how to adjust w-4. Everyone on RUclips says to follow the w-4 guidelines or go to the IRS withholdings calculator. I think even if people are single they should put at least 2 or 3 additional withholdings even if they don't have dependents. Take more money home baby! Money rules!!! Refunds suck except EIC and CTC ODC. Those rule too!!!
Somehow i only paid 100$ in federal taxes all year yet my refund is 3,900$. I don't understand why.
You might have some tax credits from something?
One correction. When you pay taxes at the end of the year that is not the gov't giving you a loan that is the gov't stealing what you earned.
Lol... alright, which ever way you like to think of it. We still have to do it unless you want trouble.
Beat The Bush, I thought about doing this and I go to my H.R office and redo my W-4 and I wanted to put 4 instead of just one. When I went to turn in my W-4 the lady in H.R asked me if I claim four people on my taxes and wouldn't let me put 4 cause I would be "lying to the federal Government." Is it lying? If it is lying do they penalize you in anyway?
I think if you show them the worksheet then you will be fine. You indeed cannot lie. You do not really have 4 people but you can effectively have 4 exemptions from many other ways.
Your face around 1:30 is pretty much laughing at stupidity of people, including me. I don't mind you judging. Your videos are always worth watching because of such humour while other RUclipsrs lack it. I knew this video would be about Time value of money and interest. 🙌🏻😅
I just graduated with 150k student loan and I was basically thinking a bit differently, it being if I should hold off my stupidity till end of year where I know what I did clearly, or if I should be tiny bit stupid throughout with it and clueless at the end where the money went. 😂. For now, time to just focus on job hunt with mech e.
+devilhere17 Trying to convince via all means I know how.
+devilhere17 OMG 150k, out of state or private school? That is a huge burden and hope you can pay it off quickly.
international student loans, private on discoverstudentloans.
Ouch, International people have so much cash. Or..... gets charged so much....
But I am single with no kids so I always put 0 on every line. Am I doing something wrong ?
I guess it depends on what your interest rate is on your savings account. The major banks(most people have) offer 0.01%APY in savings, which is essential pennies. Doesn’t seem worth gettting 5 cents a month to get your money instead of a lump sum at the end of the year
If it's low, get a higher rate one. It's 1.55% at Synchrony and 1.5% at Discover right now. Get it, its free.
Glad to check this vedio out in my last year of school...
=D Good luck!
I don't quite get it, Don't you have to pay taxes anyway.. What is it that we are checking off so we don't give more than we should?
You failed to talk about those that pay no taxes in but get like 4000 to 5000 back because of earned income credit with children. How do they adjust so they don't get any refunds?
Oh yes, I failed to do that. But that isn't about that.
how would you get interest if it took you a year to pay into savings account at the same rate you was taxed
You have to average it. Less interest the less time the money is in the savings account.
How do u find the median where u won't owe or receive a tax refund at the end of the year?
You cannot get it exactly but you try to shoot for it via properly accounting for all your deductions you are likely going to get.
Yes, you did it! See what I told you? You need my support, my friend. And I also like the idea about the Savings Account thing. Didn't thought about it like that. But I still barely understand what Exempt stands for in which person should go for that.
Thanks for your suggestion! It really depends if you are disciplined enough to not spend a larger paycheck. Exempt means exempt from paying taxes (i.e. you do not have to pay taxes). If you paid taxes last year, then you cannot say you are exempt.
+BeatTheBush I guess I'll have to talk with the recruit team cause I barely understand these things. But now I have a concern, I have a friend that does my taxes and now says that things changed for this year and people who has many credit cards hurts your credit. She wasn't talking about Hard Inquiries, but as if you are someone who possess several credit cards like yourself it hurts your score because apparently things changed on how to calculate scores this year. Do you know anything about it? I think she is confused because for me is not how many credit cards you possess but how you manage those.
If I make $100,000 a year before taxes and I file exempt for the year and I’m single. And let’s say I put aside $2500 a month in a savings account with interest so I can pay back the irs at the end of the year whatever I owe, and accumulate interest during the year at the same time. Would that be ideal or stupid?
Not only do you give the government a free loan, but if you're defaulted on things such as a student loan they can confiscate the entire refund.
Huh... that sucks but it sounds like a rare situation where that will happen.
It probably is, I only know because it happened to my buddy this year. He checked the status of the refund and it said letter pending, then a week later had an envelope from the Department of Education saying that his federal return is going towards unpaid student debt. I will forward him this video for future reference lol.
IF you are getting 4000 dollars refund. Put some money refund in 401k money!!
You can do that or just put it in as you get it throughout the year.
If you like receiving refund 4k a year. Put it the 401k for 10 years.
That 40k dollars for 10 years.
Thank you. This helps out a lot.
You're welcome!
i was talking to somebody about this the other day! I want to owe taxes at the end of the year, I used my money to make money not let the gov use my money to make money.
If you work for a company, you can adjust your exemptions.
I don't want to be underpay and get penalty after changing W4 because my income is increasing and deduction (property tax, loan interest, 401k contribution etc.) might decrease in following years, so it's hard to have a fixed number of exempt in W4. What might be the workaround for that?
If your deduction is decreasing you can always adjust your W4 accordingly to have more taken out of your paycheck. You could also make additional payments by saying so in the W4.
BeatTheBush thank u
You mention a penalty will be given if one has to pay "too much" back. What is "too much"?
There are some complicated guidelines for this. Generally if you owe less than $1000 then no penalties. More rules here: www.irs.gov/taxtopics/tc300/tc306
Thanks for the information. WOW.
=D
I always have my paycheck direct deposit to savings rather than checking. It restrain unnecessary spending habits.
What do you do when they are taking too much out if your paycheck? How do you adjust it on the W4. I make about 1000 a week, and more with overtime but sometimes my check is just barley 700 dollars or less if I do overtime. It's a ridiculous amount of money coming out. How do I stop this? I'll get like an 800 dollar refund. I have no children no special circumstances
You can adjust the W4 to increase the exemptions. But you might go over. In this case you can compensate by putting a dollar amount of deduction in addition to the exemption amount.
(Sorry to butt in here) Is it too late now to adjust our W4s? I think I've always had mine at 0 (nobody ever really explained any of this to me). I'm married but we file separately because he's on disability. I got about $2,000 back, so obviously that's not a good thing... I would definitely like to have money I can put in my savings account to get interest.
No, it is not to late to change or adjust your W-4 Form. You may change whenever you want and as often as you need to. IIRC I was able to do it online at my employer's "human resources" website
With so much deduction I don't see any effect at all in my return especially on medical bills when using Turbo Tax.
Not sure what you are seeing. Taxes are very complex and will be hard to find the issues through comments.
That is actually a perfect explanation. Also those who like to get a refund in the end of a year have to consider a USD inflation rate which is about 2%. So instead of making money out of those that were not spent on taxes (buying stocks, cryptocurrencies, etc.) a person will receive, for example $2000 in the end of the year, which were actually $2040 in the beginning of the previous year.
Sometimes people just LIKES having a refund, cant seem to shake that. Well, for those that likes it you lose out a little.
Huh? So what should exemptions be if its just one person without being penalized? Thank you
It varies depending on the amount of deductions you have.
Do you know what I will need to set my exceptions to keep my money from taxes. I am a full-time employee
Can anyone simply this?
So u get 2000, and u loaned 2000...I’m confused
$10. I'd say not worth even filing the W-4 let alone the risk you might blow the money. If interest rates go back to where they were in the 1980s that might be different!
I used to go the first 6 months with 10 kids and then the next 6 months I would give them up for adoption. I would keep most of my money during the year and get a small refund.
This sounds like a joke.
whatever percentage interest gained on savings instead of a tax refund will barely buy you a meal at McDonalds. Either way you do it, you're not going to see any large boost in savings.
Depends on how large a return you get. At 1.5% APR high yield savings, it's $15 every $1000.
I mean I understand the point of your video, but to say that tax refunds are bad over a possible $15 dollar loss is a stretch. I enjoy most of your videos as I am a penny pincher as well.
Why are you suggesting a 1.5% savings account, instead of adding it to a higher return investment? 10% per year is a lot more than 1.5%. Though if you're putting in money monthly, the interest is only the full percentage for the portion invested in January, for 12 months. The other investment amounts are only there for 11 months, 10, 9, 8...
Is there a way to determine how a person should pay in taxes based how much he/she makes annually?
Nope. You still need to know the type of deductions you get. This vary greatly depending on your tax situation. I.e. mortgage tax deductions, etc.
Sounds like you can’t owe them too much or there is a penalty? And conversely, I thought I heard that you do get extra, above what you would have got otherwise, if you paid in more than you owe. Thoughts?
Correct. No, in the end you pay what you owe from the total bill. If you paid some during the year, it gets subtracted from your final bill.
What about the child & dependents credit . Also the earned income credit. How do we get that back????
You fill out your tax forms properly. And if you are due a refund, you will be sent the money in various ways.
Now that you explain it that way, wouldn't it be smarter to not pay any taxes throughout the year, then pay a big tax bill at the start of the year. This way, all that money could have been earning interest year round ?
No it wouldn't because if you owe significant taxes, you will be charged a penalty by the IRS negating any interest you would earn. Plus, I'm not a big fan of sloshing money around and then you'd worry about having enough cash at the end to pay a huge tax bill all at once.
Hi BeatTheBush! If I have to pay the government a bit of taxes, what is the cutoff at which I'd have to pay a fine?
How do I make it so that i'm not overpaying taxes on my paychecks?
You make sure you factor in all the things that reduces your tax liabilities on the W4 form.
If I usually get a large refund due to different tax credits should I just claim 9 or something to off set that?
The number to get as close to zero as you can without paying taxes will depend on your deductions and pay. So I would just work out the number on the form where you can factor the tax credits you will be getting.
It’s not illegal to file exempt?
On the w4 there is an "additional withholdings" line near the bottom.
I tried to put a negative number in there, and my HR called me and said they can't do that :(
LOL! =D =D =D -$1,000,000 LOL! If you add in "qualifying home mortgage interest, charitable contributions, state and local taxes, medical expenses in excess of 10% of your income, and miscellaneous deductions", you might be able to up your exemptions.
goal was so I kept my total paycheck and just pay everything I lump sum in April.
Even if you could, you would pay a penalty for owing too much.
i wanted to do the math and see if the opportunity cost would pay the extra fee. Or pay them every 3 months as a self employed person would. I believe that keeps the fees out of the question.
Hi I single and I pay for rent 1000 every months.my paycheck is 1150 and but I revive just 900 every paycheck .so I give the government every month about 500$ and I have debit and credit card .I pay all my pills so I won ask. How do you think tax refund I get in the end of the year.thanks
Forget the tax refund. You really should try to get your rent lower. $1000 is a huge portion of your pay. Is there anyway to live with roommates and get it lower for yourself?
Do you think it’s wrong to increase my exemptions from 1 to say 3 or 4, even though I’m single with no dependents. I really don’t mind owning the irs a bill. I’ve always entered “1” in prior years W4s and I still end up with a refund. I make ~$135k and max out my 401k account.
Can you not look through the form and fine ways to increase the exemptions? For example, additional deductions from mortgage interest?
BeatTheBush thanks man. Unfortunately I don’t own a home. Trying to pay off a massive 6 figure student loan
if you make 135k a year, you can easily knock that 6 figure loan. You just have to be willing to live very minimalistic for a while. I make almost 6 figures and live like I only make 30k, and me and wifey are happy. I paid off her 40k of loans in less than a year and we save enough to travel few times a year.
that is also true when people put extra money toward mortgage principal.
+Thanat Pattana Easy way to earn effective net worth and sure beats 1% interest. I bet banks don't like that too much though. =D
That is true but for high earnings single, there is very small chance I can avoid having my large part of my income withheld
As long as you do not owe huge taxes at the end. You get less than about $1000 in refund is a good area to be in.
What is the exemption number I would have to put to get more on refund ?. Like from 1-5?
You would decrease the number so that they withhold more taxes. Then you will get a bigger refund. Of course, you cannot just adjust the number, you have to go through the W4 worksheet.
0
I claimed exempt by accident this year and I forgot to correct my mistake. Luckily I was one of the few who qualified. Still got 1k~ refund
Oh good!
how do i find out the correct amount i need to pay? thank you
You have to go fill out the form. Here is a video showing how: ruclips.net/video/c_1DifHtUWA/видео.html
You can thank Milton Friedman for this. He thought people would be more opposed to taxation if they were withheld. Instead it makes people more compliant so they get their refund
I agree with the last statement or maybe I only know so from observing in hindsight.
BeatTheBush it's brilliant in a way for that purpose. Considering how many people don't deduct correctly and how many would not file of not for the promise of a refund. But it ought to be repealed. And while we're here, the tax simplified so you don't need to hire someone.
Hello, I'm an upcoming college student and I wonder when I fill out the tax, what's the best solution for me to get a strong start?
I believe as a college student you can fill out the 1040EZ (for easy) and the due date is same for everyone.
Wow thanks for video didn't know this!! Let me ask a question I have a job that makes extra money in winter for 3 months and I'm almost positive I've been paying insane extra taxes during those bigger check weeks is there a way to take advantage of this with taxes or pretax accounts etc? Hope I asked it properly if I didn't I'll respond again! Thx
+S D You can adjust your exemptions to reflect your full year income. If you're getting a really large refund you might need to increase your exemptions. Generally too much work to adjust this stuff on a per month basis.
BeatTheBush o no I will talk to my tax guy and adjust myself from a 1 to a 2/5 to lower my April tax return id rather have more money all year round to spend:invest! I was referring to a 401/ira pretax account to hide away some pretax money if say for 3 months my checks are much bigger then normal i feel my taxes go up because it's lots of overtime but it's so hard trying to figure that part out. Does my second question make sense now?
Yeah, no!!! I always owe!!! When I get money back, it's mine!!! Why not just invest it??? I went through a divorce and I pay child support so when I was in arrears they took whatever I had. Didn't really mind cause it got me caught up. However, I also had to o give up half of my 401K so whatever money I can get I put back into saving for my retirement. I understand your theory but it's just not feasible for everyone. Especially if you have debt and low income jobs. Just my opinion.
I put this year that I have 3 dependents but I really have none. I'm scared and lose sleep some nights...especially knowing that tax season is just around the corner. I want to change it back to zero dependents but I wonder...what will happen to me? Will I be in big trouble with the IRS? Or will I just have to pay back the money?
Don't be too worried about that for your number of exemptions claimed. Do you have other exemptions you did not account for? Worse case is just that you have to pay taxes and possibly a penalty. If you got a huge refund last year, you might just get something a lot smaller this year. It really depends.
I didnt get anything big last year. I got maybe a 1500 or 1200 dollar refund. It was regular or below average. Also, I am currently in Texas and they don't have a state income tax so I am thankful, but yeah the Federal still takes money out of you wherever you go. So should I still be worried? Well maybe I could put in the moving expenses? how about the a new laptop I just got?
Also, thank you BeatTheBush
Hmmm I think you might owe taxes because 3 exemption might put you at reducing the amount you pay per year by about $3000. This is a really rough guess of course. So you will do well changing it to 0 or 1 for the rest of the year.
Ouch. So if I change it to 0 or 1 I will be fine?
How much taxes you have to owe the government at the end of the year before they put a penalty on it?
Last I looked at it, it was a variable amount. The more you owe, the higher the penalty.
I work for the IRS and we advise people to only have as much taken out as to not owe. problem is people either don't have enough and relying on a tax preparer (HORRIBLE MISTAKE) or too much so they HAVE to rely on refund to sustain them. Sad really
Not owing is the key of course or else there is a penalty. Purposely getting a refund does cost the person slightly in terms of opportunity cost. It matters to those who are trying to squeeze every dime out of their cash flow.
Can you make a video about writing off expenses on your taxes?
I got refunded 12 for the last year. Did I do it right?
$12? Yes but you got lucky. If it was owed money, you may have to pay a penalty.
Good info..i tried to tell some ppl about tax refund not been a good thing but they laughed at me like i have a looser sign on my forehead..lol
Ahh... so next time... just keep to yourself until they ask you how you retired so early.
How exactly do you set the exemptions?
You do the calculations on the form and then you write a final number down. Then you turn that form into your employer. ruclips.net/video/c_1DifHtUWA/видео.html
Thank you🎉
Years ago I dated an accountant. She told me the same thing.
=D
Love your channel. How much difference in pay is it if you claim zero instead of 1 ?
It depends on your tax bracket. Reducing exemptions increases your taxable amount. So if your tax is in the 25% bracket. 1 to 0 change will increase your taxable income by $4150. Or increase your tax bill by $1037 or make your paycheck go down by $86 a month.
BeatTheBush what's 25 percent bracket ?
do you file your taxes for free/cheap? if so, please share!!
No, I buy a copy of TurboTax and run through it myself.
As I watch this video I have a tax repayment (£98) in front of me that I received about 50 days ago.
iv told people this and they don't understand my way of thinking . for example i make about 23,000 gross and walk away with maby 15,000 a year now I get 90% back . that did nothing for my money it sat in the governments hands for a long time and gave it back when they got done
Yeah... not everyone understand the tax is a marginal tax rate. You have to sit down and really look at it if its your first time.
BeatTheBush I am a full time student and work part time ..I made around $15000 ..This year gonna be my first Tax on my own ..Every time I see my pay check gross pay is like 630 and I got only 490 ...when it is 550 I got about 420 ..and the paid is weekly ..so my average tax deduction is about 300 to 400 .so I am hoping to get more ..and How to not get tax return and make pay check a lit more bigger ?
BeatTheBush so will i have to talk to my Human Resources to do this? i really hate overpaying but don't know how to fix it so i dont owe or overpay please halp
0:20 W-4 Form
ok nice, can your start a financial crash course from like an entry or high school level. tkx
I had something like it here: ruclips.net/video/eVv5fAyhyTU/видео.html
If getting a tax refund is bad how we gonna get income back
Soo funny the ice bat hanging 😂😂 cute
Ha! You know his name is ice bat!? =D =D =D
Yes 😍
its an ice keese