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Ask Lane Your Own Question

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3837
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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what are the maximum number of deductions that can be claimed

Resolved Question:

what are the maximum number of deductions that can be claimed for a single parent making 85000 per year
Submitted: 9 months ago.
Category: Tax
Expert:  Lane replied 9 months ago.

Lane :

Hi,

Lane :

You're fine .... For 2013, ingle 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.

Lane :

So, you can take the personal exemption, your spouse can take one (if you file jointly) that's 3900 each

Customer:

I am a single parent

Lane :

Then for single the STANDARD deduction is $6,200

Customer:

I have a 17 year old son and would like to have the least amount of taxes taken out to make ends meet

Lane :

the one 3900 exemption for you and one depemdemcy exemption of the same amount for each shild

Customer:

my income has been reduced by 20000 this year

Lane :

Ahh ok, you're asking about the W-4 form at work>

Lane :

how much was your refund last year?

Customer:

yes I would like to have more in my paycheck without having to go get another job if possible

Customer:

I had to pay last year but my income was much more

Lane :

just saw the 20000 piece... let's just busild it from the ground up and estimate your total taxes for the year

Lane :

SO how many dependants?

Customer:

myself and my son

Lane :

ok

Lane :

can you estimate your annual GROSS income for this year?

Customer:

85000 it was 115000 last year

Lane :

ok ... one ore thing .. do you itemize or take the standard deduction?

Customer:

I believe it was the standard deduction I just had the mortgage interest last year. now I have a 401k and pay for benefits

Lane :

AHH ok that generates one MORE question ... how much is going into the 401(k) - Tha reduces the taxable income

Customer:

i currently have 400 in there so far. 25 per pay period 2x month

Customer:

its not alot but it is something

Lane :

ok give me juuust a sec and I'll do a projection of the taxes ... IS the mortgage interest and reral; estate taxes more than the 6200 standard deduction?

Customer:

I was layed off at the end of July but did not have to get unemployment. yes the real estate taxes are 7000

Lane :

WOw ok we definitely need to itemize ... in that (sorry one more) how much mortgage interest?

Customer:

mortgage interest is approximately 18000

Lane :

ok let me frop inthe numbers

Lane :

"drop"

Lane :

into a tax projection

Lane :













































Gross income$85,000
Qualified plan contributions-$650
Adjusted gross income=$84,350
Standard/Itemized deductions-$35,000
Personal exemptions-$3,900
Taxable income=$45,450
Tax liability before credits$7,291
Child tax credits-$500
Estimated tax liability=$6,791
Lane :

NOw, can you tell me how much withholding is being take out now? (We'll net that against the total tax of 6791, to see how much you're overwithholding, if you are)

Customer:

I have 7000 federal taxes removed from my salary so far this year

Customer:

single 4

Lane :

OK, so that will be arond 8400 by the endo of the year

Customer:

yes

Lane :

That means that if you change nothing, you'r looking at 1609refund

Customer:

God bless you . I am not a numbers girl that is why I became a nurse

Lane :

:) We need nurses more than number crunchers

Customer:

ok so do you suggest I leave it alone

Lane :

You ARE pretty close ... let's see at a TAXABLE income 45000, that puts you squarely in th 25% bracket

Lane :

So ....

Customer:

It is just tight with the salary decrease

Lane :

1600 / .25 = thats bout 6400 of income you'r having money withheld against that you don't need to

Lane :

you could VERY safely add 1 allowance on the W4

Customer:

do you know how much that would give per pay

Customer:

or month

Customer:

approx 260

Lane :

1600/12 = 133 a month

Lane :

yep

Lane :

I think you're better at numbers than you let on

Lane :

266 a pay

Customer:

alot of it would be dependent on the true numbers that I will see in the beginning of January correct?

Customer:

simple stuff I can do but start with tax brackets and you lose me quickly

Lane :

If the annual amount stays the same ... you still have the same itemized deductions ... pay stays the same ... then looking out over the NEXT year if you add 2 llowances on the w-4 that'll pu more than that back in the paychack ,,, but you'll ose some

Lane :

If you add 1 (each allowance is 3900) you'll still get SOME back, but it will put closer to 100 back in

Customer:

but I'll lose some?

Lane :

yes.. i was just backing into how much total income (about 6400) that you're withholding AGAINST

Lane :

adding an allowance takes that doen by 3900

Lane :

"down"

Customer:

so I would be safer with 1 additional allowance

Lane :

so adding one allowance will only put about 100 back into each paycheck, but you'll still get a small refund at the end of the year

Lane :

Exactly

Lane :

2 will put more back in the paycheck, but hacinr you owe at the end of the year

Customer:

ok it is something Thanks so much for your help. Much happiness and blessings to you and your family in the upcoming holiday season.

Customer:

I don't want to owe anyone anything,lol

Lane :

You too ... glad to help ;;; I tink you haveyour arms around it now

Customer:

Yes I have a better perspective now

Lane :

then add one (all other things being equal) that will be safe

Lane :

very glad to help

Customer:

I think I am going to move to Texas where you only get taxed once

Lane :

Yes, NJ IS one of the worst

Lane :

FL, TX, TN, NV

Lane :

Actually, just looked it up:



  • Alaska

  • Florida

  • Nevada

  • South Dakota

  • Texas

  • Washington

  • Wyoming


Two states have a limited income tax on individuals. These states taxonly dividend and interest income:



  • Tennessee

  • New Hampshire

Lane :

OF COURSE, someties they make that up with hugher property and/or sales taxes

Customer:

Thanks When my 17 year old gets settled in a few years I may consider it seriously

Lane :

Many do!

Lane :

Here's a great stie for looking at the various states for reitrment purposes ... ALL kinds of data

Customer:

some property taxes in NJ are upwords of 14000 for a 60x100 ft lot

Lane :

yes, NJ and NY and CA are whre it seem so many of the hard stories come from (from my perspective here)

Lane :

BY the way if you just bookmark this page everything will stay here

Customer:

ok thanks

Lane :

you're very welcome

Lane :

If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.


However, if you need more on this, please come back here, so you won't be charged for another question.

Customer:

You most definately get a 10

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3837
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 7 other Tax Specialists are ready to help you
Expert:  Lane replied 9 months ago.

Thank you so much!

... enjoyed talking with you.

If you'd like to work with me again just go here: Lane and enter your questions.

Thanks again,

Lane

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