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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4360
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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I need help filling out my form W-4 and VA-4. So basically

Resolved Question:

I need help filling out my form W-4 and VA-4. So basically starting with the personal allowance worksheet on the W-4, for line A which says Enter "1" for yourself if no one else can claim you as a dependent. Well I'm not sure if I'm considered a dependent or not. I am 22 years of age, attending college on a part-time basis, live with my parents, and have a part-time job and now I'm about to start a second job which is why I am being asked to fill out the W-4.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Hi,

NPVAdvisor :

What this REALLY means is if no one else WILL be taking you as a dependent

NPVAdvisor :

If you qualify as a dependent for your parents (and living with your parents and being still in school ARE two things that would qualify you for them) you should simply ask them if they will be taking you as a dependency exemption on THEIR tax return

NPVAdvisor :

You MAY want to approach it like this ... It is very probably that they have more household income on their return than what you will have on your return .... SO ...

NPVAdvisor :

because the dependency exemption is a reduction of income for calculating tax, it will be worth more to those in a higher tax bracket

NPVAdvisor :

And if they are providing houseing and other support, it might make sense to let them take it on their return

NPVAdvisor :

Make sense?

NPVAdvisor :

Here are the qualifying rules:

NPVAdvisor :

If all of these rules are met, you are your parent qualifying child and they can claim you as a dependent.


To be a qualifying child:




  1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.




  2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a full-time student, and younger than you (or your spouse, if filing jointly), or (c) any age if permanently and totally disabled.




  3. The child must have lived with you for more than half of the year.2




  4. The child must not have provided more than half of his or her own support for the year.




  5. The child is not filing a joint return for the year (unless that joint return is filed only as a claim for refund).




  6. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.



Customer:

Rule 2 is what I'm a little confused about. I'm a part-time student so..

NPVAdvisor :

Yep, was just about to drill down on that one.... just found a Journal of accountancy article that clarifies...

NPVAdvisor :

  • Age: The child must be under age 19 or a full-time student under age 24 at the end of the year. To be considered a full-time student, the child must be enrolled for the number of hours or courses the school considers to be full time and must be a student for at least five months during the year.

NPVAdvisor :

I would rely upon this to say (given what you've provided) that your parents will not be able to claim you this year

Customer:

Well I'm definitely a part-time student. So it looks like I'm putting "1" for line A

NPVAdvisor :

Article was not onliy in the peer reviewed Journal of the AICPA and the accounting profession, uses tax court decisions and other rtreasury regulations that clarify and refind the sometimes ambiguous IRS publications them selves ... further this was written by


Nancy B. Nichols, Ph.D., CPA; Susan Q. Ferguson, MSA, CPA; and William M. VanDenburgh, Ph.D.

Published August 01, 2010
NPVAdvisor :

Yep

NPVAdvisor :

1 goes in line A for you

NPVAdvisor :

If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

Customer:

Okay thank you I have a few more questions regarding W-4 and VA-4 if that's okay with you

NPVAdvisor :

sure

Customer:

for line B I'm not sure if I should put "1" either b/c it asks about 3 statements. I know the first 2 i don't satisfy but i'm a little confused about the third statement which says your wages from a second job or your spouse's are $1500 or less. The word wages in the statement is confusing me. Is it referring to monthly wages or annually?

NPVAdvisor :

OK let me pull up the form... just a sec

Customer:

that's fine

NPVAdvisor :

Yes, that's annually ... if you read some of the other directions they provide for filling out this (and other) forms, you'll see that the default is always "annually."

NPVAdvisor :

FOr example, they say to gather your W-2's when filling out the W-4 .. W-2's along with all other tax reporting documents from employers (such as 1099s) are published annually

NPVAdvisor :

You can very safely read that to say, "Your wages from a second job or your spouse’s wages (or the total of both) are $1,500 or less, annually"

Customer:

okay so I do make more that annually so do I just leave that line blank?or what are you supposed to put when you don't satisfy a line

NPVAdvisor :

yes, leave it blank, or you can use zero

Customer:

now would you recommend me putting 0 for line C?

NPVAdvisor :

Yes, in your case 0 is the only choice

NPVAdvisor :

(I'm assuming you're not married) :)

Customer:

Yes, that is correct. I guess i never mentioned that

NPVAdvisor :

Not specifically, but I thought that might be a good guess given the rest of the fact pattern (NOT a given, though)

NPVAdvisor :

By the way, here's an excellent article: http://taxes.about.com/od/preparingyourtaxes/ht/W4.htm (Don't over-read. I don't mind hanging with you here, it will just provide a little more context)

Customer:

what's the deductions and adjustments worksheet all about?should i fill that out too?

NPVAdvisor :

I'm so sorry, but we've been at this for over 45 minutes now, and I have a 3:30 meeting (for which I need to prepare) ... What I can do is move us to the "Q&A mode," where we can continue to talk, just not in real-time chat as we can here) I will be checking back in around 5:00

NPVAdvisor :

No, given your situation, there would be no need

NPVAdvisor :

This is for truly atypical situation where someone is, say, a business owner and knows they're going to have a lot of offsetting losses, for example

NPVAdvisor :

Once you've done the mat anc completed the W-4 itself, you're done

Customer:

no problem i'm in no big rush and you're being really helpful thank you

NPVAdvisor :

sorry for the typos ... done the "math and ..."

NPVAdvisor :

Great

NPVAdvisor :

I'll move us now a,d then check back in a little later ... should be breaking out by around 5;00 (ea)

NPVAdvisor :

Thanks

NPVAdvisor :

Lane

Expert:  Lane replied 1 year ago.


Hi

 

Don't rate yet (unless you have everything you need)

 

Again, be back on in just a while

 

Lane

 

Customer: replied 1 year ago.

Can you please explain line 7 of the W-4 to me? the one that starts by saying "i claim exemption from withholding for 2013...."

Expert:  Lane replied 1 year ago.

This is for those that know that they will have losses sufficient to offset the income totally

...(or possibly for those that will have extra withholding done by their spouse (or them selves) at another job.

Just so you know, there is a penalty for underpayment of taxes, if you don't have enough withheld (or if you're paid as a contractor and get a 1099, hence have NO withholding, and have to do your own estimated taxes and don't send in enough estimated payments).

Customer: replied 1 year ago.

oh ok so if i've properly done my taxes and will continue to do so then i can write exempt?

Expert:  Lane replied 1 year ago.

When you write exempt, that means that you know that there is some reason that there will be other payments made to the IRS to offset your "exempt from withholding" status.

Writing exempt is almost NEVER a good idea, again, unless you are planning on making those tax payments a different way, OR you know that you have some other losses somewhere that will offset the need for the tax withholding.
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4360
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 4 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.

Thanks so much for the rating.

If you’d like to work with me again, just say “For Lane only …” at the beginning of your question, and I’ll get the alert.

Thanks again,

Lane

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Lane
Lane
Tax Professional
4360 Satisfied Customers
Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986