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I'm not sure if you could shed any light on this, but this…

Customer Question
Hi, I'm not sure...

Hi, I'm not sure if you could shed any light on this, but this is my first year with an actual salaried job, and I'm not sure I have my tax allowances set up appropriately

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

Well, my job is a little different than most. My salary is split into two parts, so I receive 2 w2s at tax time. My co-worker says I need to set my allowances to 0, but I would ideally like to set it to 1 if I could do that without owing money

Accountant's Assistant: Is there anything else the Accountant should be aware of?

My base salary is listed at 50,000 and the second part is 17,500

Submitted: 4 months ago.Category: Tax
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3/19/2018
Tax Professional: Gerald, Esq, Attorney replied 4 months ago
Gerald, Esq
Gerald, Esq, Attorney
Category: Tax
Satisfied Customers: 5,446
Experience: Over 30 years of experience.
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Hello,
Thank you for using Just Answer. Please bear with me while I review your question. I will respond fully shortly. Thank you for your patience.

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Tax Professional: Gerald, Esq, Attorney replied 4 months ago

I am working on you ranswer. It is a little more complicated than you might think. Please bear with me.

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Customer reply replied 4 months ago
Thank you very much
Tax Professional: Gerald, Esq, Attorney replied 4 months ago

Hello,

Thank you for your patience and thank you for using Just Answer. I want to provide you the best service I can. Please feel free to ask any follow-up questions you have.

I am an attorney with 30 years of experience; I hope to provide you information that will help you in resolving your question.

You should probably claim Single with 0 dependents. Here is why:

How you set your allowances affects how much and whether you would receive an income tax refund or have to pay additional money.

If you are single and have no children, then you can claim Single 0 or Single 1. Single zero means that you are claiming no dependants and therefore you have the most money withheld from your paychecks. You would then likely have a refund due you when you file your income taxes in 2019. If you claim 1, then less money will be withheld.

The tax rate bracket that you fall in with an income of 67,500.00 is 22% under the new law.

Because your one paycheck is only $17,500.00 your employer will be withholding only at the 12% rate on that paycheck. So that pay will be 10% short if you claim single 0.

BUT there is another alternative. You can claim Single 1 but ask that additional with holding be taken to make up the difference.

It is hard to say exactly what that additional amount should be but we can estimate it to be $1,750 over the course of the year. So you can claim Single 1, and then ask to have an additioanl withholding equal to $1,750 divided by the number of pay periods you have in the year.

I hope the information I provide is useful to you. I want you to be comfortable and satisfied with my attempt to assist you. Please, if you have ANY follow-up questions, feel free to ask.

If you ask a follow-up question and I do not respond immediately, it is because I am temporarily unavailable. I promise to respond as soon as I return. Please note that I am often unavailable Friday evening through Sunday.

Please do not forget to give me a positive rating. It adds nothing to your costs but helps me greatly. Thank you.

If you are dissatisfied with my response, PLEASE let me know before giving me a negative review so that I may try to be of better assistance. Or, if you prefer, let me know and I can “Opt Out” and your question can be re-posted without additional cost to you. I will be fair to you, and only ask the same from you.

Good luck.

Please note: Information is educational and not given as legal advice. Only your local attorney can give legal advice. I can't establish or accept an attorney-client relationship with you. All posts are available for public viewing.

Kind regards,

Gerald

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Customer reply replied 4 months ago
Thank you for your response. I am pretty clueless when it comes to taxes, so if I decided to claim single 1, what would be the likelihood that I owe money at the end of the year? I am not looking for a huge tax refund, I just do not want to owe money at the end of the year
Tax Professional: Gerald, Esq, Attorney replied 4 months ago

If you calim Zero 1 and do not have additional funds withtheld you will have to pay additional money at the end of the year. Approximately $1750.00. If the IRS determines that you did not have enough withheld because your tax liabilit is 10% or more of your income you could pay a penalty.

You avoid this penalty if you either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if you paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year.

So there is a bit of math that you may have to do.

BUT you can figure that you will owe about $1,750.00 additional taxes by claiming Single 1 and NOT having additional withholding.

Kind regards,

Gerald

(Please do not forget to rate me – click the five stars. It adds nothing additional to your costs, but it helps me greatly. Plus it is good Karma for you. Thank you.)

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