basically every allowance on the w-4 is like adding another exemption , the person/dependency exemption for 2013 is $3900
So if I have another $45,000 of annual interest at a 40% tax rate would I add 4 new allowances?
So, IF it happened that your additional deductions from having the condo (mortgage interest, property taxes) ended up being 3900 - which i won't, exactly, of course you would add one exemption to keep things as they were before
oh i see
so i would add 11 allowances
mas or menos?
nope you are right ... you just beat me to it
i think there is also a phase out based on income
what about the phase out?
I wasn't factoring in the taxation (tax benefit - deduction times rate) to get to the actual income withheld against
you nailed it
so 11 allowances...
no, at 45000 x . 4 = 18000 / 3900 = 4.61 you mailed it
ok got it
and is there a phase out?
Single filers with adjusted gross income (AGI) in excess of $250,000 or couples who are married filing jointly and have AGI in excess of $300,000 will also face phaseouts of their deductions and personal exemptions. The phaseout of the personal exemption (sometimes called “PEP”) means for every $2,500 of AGI (or portion thereof) above $250,000 ($300,000 for married couples filing jointly), the $3,900 per-person personal exemption will be reduced by 2%. For married couples, personal exemptions will be fully phased out once their AGI exceeds $422,501, or for single filers if AGI exceeds $372,501.
we crossed in the "mail" again .. did you see that?
The phaseout of itemized deductions (often called the “Pease” phaseout) reduces the value of itemized deductions by 3% of the AGI above $300,000 for couples, and $250,000 for single filers—to a maximum reduction of 80% in value. ALSO, itemized deductions for certain medical expenses, investment interest, and for casualty, theft, or gambling losses are exempt from the phaseout.
i think i have clarity
thanks a lot for your helpful
You're very welcome!
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