How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Christopher Phelps Your Own Question

Christopher Phelps
Christopher Phelps, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2710
Experience:  CPA, CFP, PFS, Tax Practitioner 21 Years, Member AICPA/CSCPA Tax/Financial Planning Committee Member
84937
Type Your Tax Question Here...
Christopher Phelps is online now
A new question is answered every 9 seconds

How much money is each tax exemption on the W2

Resolved Question:

I'd like to know the approximate money difference between claiming 2 or 3 exemptions on the W2 form.
Submitted: 9 years ago.
Category: Tax
Expert:  Christopher Phelps replied 9 years ago.
How much is your taxable pay (i.e. gross less medical & 401(k)) per pay period? Are you paid weekly, bi-weekly, semi-monthly or monthly? Are you claiming single or married? What is your current Federal w/h?
Customer: replied 9 years ago.
Reply to Christopher Phelps's Post: Gross pay is approx $2,230 and is bi-weekly. Medical is on a pretax basis. No 401K at this job yet, just started. Claiming single, one child, head of household. My prior job I only had 2 exemptions and made much less. Now I make more and claimed 3 because I'd rather the money now, just don't want to end up paying alot at tax time. Based on the salary, can you give me an idea what the difference would be between 2 and 3 exemptions?
Thank you.
Expert:  Christopher Phelps replied 9 years ago.

Going from 3 to 2 exemptions will increase your Federal withholding by about $31. This is approximate because different employers calculate w/h differently, but will generally be within $5 one way or the other. On a 26 pay period year that difference amounts to about $800.


I took the liberty of estimating your tax liability for a full year of employment. Assuming you earn gross annual taxable wages of $57,980 (i.e. $2,230*26) and assuming you will take the standard deduction for 2005 of $7,300 and personal exemptions of $6,400 (2*$3,200), you will have taxable income of $44,280. The head of household schedules indicate your initial Federal tax liability will be about $6,600. Assuming you are eligible for the child tax credit (i.e. $1,000), that liability will be reduced to about $5,600. Your Federal withholding with 3 exemptions should be about $315 ($346 with 2 exemptions) per pay period for an annual total of about $8,190 ($8,990 if 2 exemptions). Thus, you appear to be in line for a significant refund assuming you have no other taxable income.


If I were you I would consider at a minimum, maintaining your exemptions at three. You might even consider upping the exemptions to 5 which would result in Federal withholding of about $253 per pay period for an annual total of $6,590, which is still $1,000 above your projected liability. Also, you may be eligible for the dependent care credit if you pay for child care so you can work. See form 2441 at http://www.irs.gov/pub/irs-pdf/f2441.pdf. If you paid at least $3,000 for child care (and you were not reimbursed by your employer or otherwise received Sec. 1125 benefits) you may be eligible for an additional $600 credit.


I also suggest you fill out a W-4 (http://www.irs.gov/pub/irs-pdf/fw4.pdf). Filled out properly you will see that you are entitled to 5 personal allowances (i.e. 1 for yourself; 1 for being single with 1 job; 1 for your dependent; 1 for filing as HOH; 1 for the child tax credit).


Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.

Christopher Phelps, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2710
Experience: CPA, CFP, PFS, Tax Practitioner 21 Years, Member AICPA/CSCPA Tax/Financial Planning Committee Member
Christopher Phelps and 3 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.