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01-30-2017 11:27 AM
I always end up owing taxes at the end of the year. What allowances do I claim if I have two jobs to either break even or have no amount OWED???
I do not know what allowances to claim at which job & always pay taxes @ years end. FT Job =$43529/yr currently listed as 1 allowance & PT job = $19148/yr with 0 allowances. HELP me to figure out what to claim on my W-4 as allowances for each job to ensure I DO NOT OWE EVER AGIAN??
01-30-2017 01:50 PM
Welcome to the community.
Let's take a look at this and see if we can't get you enough withholdings.
So we have two jobs. One income is $43,529 and the other provides an additional $19,148 worth of income. That's a total of $62,677 worth of income, so you're in the 25% tax bracket and you definitely need maximum withholdings. You need to claim 0 exemptions from both jobs & possibly request additional withholding on top of that, and I'll show you why in a moment.
Your tax liability on $62,677 (of which $52,327 is taxable) taking into account only the standard deduction for a single taxpyer and your personal exemption is $8,853.
Your tax withholding with zero exemptions is 10%, so that would give you $4,353 on your first income amount and $1,915 on your second income amount. That's a total of $6,268 in withholdings. So based on this, you're still $2,585 short. For a breakeven you'll want to have an extra $50 per week taken out of your pay from the job that provides the most income. You can request the additional withholding by filling out a new Form W-4 for that job.
With all of that said this is ballpark but not 100% accurate because I haven't asked you about any credit that you may be eigible for yet, etc. If you can answer a few questions for me I'll recalculate this according to your exact tax situation.
I hope this helps you out & I'll be glad to answer any other questions you may have.
Senior Tax Advisor (Tampa, FL)
01-30-2017 02:12 PM
01-30-2017 07:22 PM
Hello, thank you for the feedback. To answer your questions;
Related to the last question I have an Americorps scholarship which I can use to pay tuition. This is counted as income and makes my gross income appear higher. If I do access those funds for school how to I avoid having to pay out of pocket for monies that are actual income?
01-30-2017 07:37 PM - edited 01-30-2017 07:38 PM
You're welcome Jrodumosu.
I did the previous calculations based on a single taxpayer with no dependents, credits, or deductions. So the figures I gave you before are actually concrete. I believe you meant 1098-E deduction for student loan interest payments, and that will reduce your taxable income by a maximum of $2,500 which unfortunately will have very little effect. You would still be looking at tax on $50,000 worth of income which is $8,278.
So you would need to claim 0 exemptions for both jobs and then you would need either $50 a week or $100 every two weeks if you're paid bi-weekly in extra withholdings to break-even. You could request all of the extra withholdings from one job or request some from each job. There's no right or wrong way work that. Of course if there was a change in your life such as marraige or buying a house, or having a kid, then you would have other tax benefits to take advantage of and it might be different.
If you were referring to the education tax credits then that's different. An education credit will reduce your tax liability dollar for dollar and that could make a fairly big difference.