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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
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Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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HOW MANY DEPENDANTS CAN I CALIM ON MY W-4 IF IM IN ...

Resolved Question:

HOW MANY DEPENDANTS CAN I CLAIM ON MY W-4 IF I'M IN THE PROCESS OF A DIVORCE?
Submitted: 9 years ago.
Category: Tax
Expert:  Ed Johnson replied 9 years ago.

Dear Angel,

For the W-4, you can claim as many as the formula determines. You can consider yourself married or single.

Simply follow the formula for your new circumstances. http://www.irs.gov/pub/irs-pdf/fw4.pdf

 

 

Ed Johnson and other Tax Specialists are ready to help you
Customer: replied 9 years ago.
Reply to Ed Johnson's Post: I GUESS I DID NOT MAKE MY SELF CLEAR THE FIRST TIME. HOW MANY DEPENDANTS CAN I CLAIM AND NOT GET IN ROUBLE WITH THE IRS?
Expert:  Ed Johnson replied 9 years ago.

AS many as you can justify.

I understand you want me to tell you a magic number, but there really is none. The IRS has does not limit the number of exemptions you can take on your W-4, except to say that you need to estimate your withholding by using the formulas.

What do you call trouble with the IRS?

The intent of the W-4, is that if you follow the form, line by line, in all of its sections, you will arrive at a figure that approximates your withholding without taking too much out or takeing too little out.

This is because you and I as citizens, should care that we are letting the government use our money interest free, so we want to limit the withholding so that we can have control of investing and spending our own money.

What happens is, that the W-4 represents estimated tax payments. The employer takes out your estimated payments based on the W-4 exemptions you provide. These are estimated taxes. If you designate too many exemptions, and you have too large a short fall in estimated taxes, meaning that you have to pay in a lot at the end of the year, the IRS can charge interest and penalties.

I do not call that trouble. I call that underestimating your estimated taxes and over-reporting exemptions. For which you can end up paying interest, and in some cases, the IRS can direct a certain with-holding level.

A form, such as the W-4, gets its name from the word "formula". This means that if you go line by on the W-4, it will guide you through the formual and you will end up with the appropriate number of exemptions. This is what I call following the formula that comprises the form W-4.

You have an opportunity to designate additional withholding or additinal exemptions.

The IRS used to set a limit of 10, then 14, now there is no limit, as it depends on your personal cirumstances which includes:

  1. filing status (single, married, or head of household). If you anticipate being single with custody or joint custody and the child will live with you, you could designate head of household.
  2. Number of family members
  3. if you are eligible for the EIC or not
  4. Number of deductions and anticpated tax credits
  5. child care expenses

And so forth.

so I am not being flip or obtuse to tell you to use the form, and that you can claim as many as your situation dictates. The only hard rule is, that you cannot claim exempt unless you had no tax liability last (current) year and expect none in the next year.

I claimed 10 on my military retirment pay for the last 3 years, but this year, not enough tax was taken out, so I have to reduce the exemptions or pay a penalty in 2007.

So when I say, that you can take as many as you can justify for your situation, that is exactly what I mean. If you can justify 10 using the form, then you can take 10. If you can justify 14, you can take 14. If you could justify 20, you can take that.

If you have to large a short fall, the IRS will charge intest and penalties.

Follow the form OR use this calculator provided by the IRS: http://www.irs.gov/individuals/article/0,,id=96196,00.html