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 Lev Your Own Question

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22750
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

I am single woman and my yearly gross income is $100,000 ...

Resolved Question:

I am single woman and my yearly gross income is $100,000 and will be increasing to $109,000 as of Feb 1st 2008. What are some ways that can help to reduce the tax on my paycheck. My monthly gross income is $8,358.92 and tax deducted is -$2,678.55.
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.

Your withholding is dome based on the W4 form that you filed with your employer.

If you filed as single with 2 allowances - your paycheck stub should look as

Monthly Gross Pay - $8,333.33
Federal Withholding - $1,622.69
Social Security - $516.67
Medicare - $120.83
Wisconsin - $522.49
Net Pay - $5,550.65

In general by increasing the number of allowances your federal and state income tax withholding will be less. However if at the tax time you will owe more than $1000 - the IRS may add penalties.

You may not change SS (6.2%) and Medicare(1.45%) taxes. As your wages will be increased - - SS tax are applied only to wages up to $102,000 (in 2008) - so your SS taxes in last month of 2008 will be less.

There are some standard ways to reduce tax pressure, while that depends on your specific situation:

  • you will likely use itemize deductions instead of standard (that is $5350 for single in 2007) - for most people the largest part of itemize deduction is a home mortgage - so consider to purchase a home if you do not owe it yet..
  • if your employer provide 401k plan - do maximum contribution - in 2008 a person will be allowed to make a maximum contribution of $16,000 and in 2009 $16,500 (additional contribution if you are 50+)
  • verify if your employer offers health flexible spending account
Customer: replied 6 years ago.
Reply to LEV's Post: You mentioned I can file with 2 allowances? How many allowances can I have and how can I determine number of allowances ? Is this different from exceptions? Please clarify what this means.

Thanks
Expert:  Lev replied 6 years ago.

The term "exemptions" is used for personal exemptions on the tax form 1040 line 6 - http://www.irs.gov/pub/irs-pdf/f1040.pdf - that number generally means a number of people in your family whom you are claiming personal exemptions ($3400 per person in 2007) on the line 42.

The term "allowances" is used to calculate withholding on the form W4 - http://www.irs.gov/pub/irs-pdf/fw4.pdf . While there are some correlations (each allowance is equal $3400 in deductions) allowances include itemize deduction above standard amount, other credits and deductions, hear of household status, etc.

Sometimes people confused these two terms and use them interchangeable.

In your situation - as you are single and nobody claims you as a dependent - you will have 1 exemption on the line 6 and $3400 personal exemptions on line 42.

The number of allowance you will determine by using worksheet on the form W4 - one as nobody claims you as a dependent and one as you are using single filing status - total 2.

If you want to increase withholding - for instance if you have taxable interest income and bank doesn't withhold any taxes you may cover that by withholding from your wages - you may use zero allowances (that will not affect the number of exemptions on your tax return).

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22750
Experience: Taxes, Immigration, Labor Relations
Lev and 5 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.