Thanks all...
adp.com
They have calculators - now toward the bottom of the home page. I use them whenever something changes for hubby / son’s checks.
If there are kids involved, be careful if you choose to claim them . . . if the mother does, prepare for a world of hurt.
Exactly! Good for you.
Although the divorce will make things more complicated, I would just take last year's tax forms, and plug in the new pay numbers to get a decent estimate for this year's and next year's taxes. The brackets really didn't change much between years.
Absent any history, you can:
1) for this year, take one more deduction than what you will be filing for at the end of the year. In most cases you will receive a refund but it will be small.
2) use last year’s tax software with this years information. It should give you a decent understand of your tax liability for the YEAR. Divide that by the number of pay checks and that should be how much you have taken out of your check - no more. Adjust your deductions to get close to that amount.
Understand that taxes, bonuses, deductions, credits, rebates, exemptions etc all change year to year so while a good guestimate, not all ways accurate.
3) Pay to have a tax service estimate your taxes for you. This is a fairly accurate way to get really close.
Claim 9 exemptions...above that your employer must report it...so
I’ve been told
There is the ADP link mentioned above but also try this. It also has a W-4 calculator.
http://www.paycheckcity.com/calculator/hourly/
You should also factor in whether you will have any pre-tax deductions like a section 125 health plan(s), contribute to an FSA or a 401k. Be careful however because 401k contributions are exempt from Federal and most state withholding (not in PA for example) but not from SS & Medicare.
Ideally you want to have enough tax withheld as to not owe anything and not so much that you get a refund. I typically do a W-4 withholding calc midyear to make sure I’m on track.
My new HR rep's merely have heartbeats for their qualifications so I need to do some homework.
FWIW, I am and have been a payroll professional for over 20 years and I will only give an employee generalized guidelines and will point them to resources to help them but I will never tell them how many exemptions they should claim as I’m not their personal accountant, may not be aware of all their personal financial situations and don’t want to give them advice that might result in them being under withheld – it’s not my job or responsibility
Find a good tax preparer who has their own business and make them your new best friend. They don’t necessarily have to be an accountant. If you have your dependents with you and you have supported (supplied their welfare) for more than half the year, you might be eligable for earned income tax credit, child tax credit and child care expense. Those contingent on child ages and your income. Again find a GOOD tax preparer who is in business year round.
OK, First my qualifications are 10 years as a professional seasonal tax preparer.
First thing is that this is the beginning of November and by your comment you are not yet legally divorced, is that correct? By law, you marital status is what it is as of 12/31/2013. If you are not legally divorced you have problems. If you lived with your spouse any time after June 30, the best you can do is MFS and suffer or grit your teeth and file jointly. If you are legally separated and no joint cohabitation after June, and/or divorced you should be able file as Head of Household (HH). HH requires you to pay at least 50% of house costs after taking out any assistance received and you house/support your children.
So it appears to me that in the old job you were probably claiming Married status and multiple exemptions (5?) so that there was minimum withholding. If you think that you will be qualified for HH status by the end of the year, make sure that is included in your W4 computations as an added exemption. Also there are spots for adding in Child and Dependent Care Expenses as well as Child Tax Credits (all of this depends upon the age of your children). I can easily seeing you claiming 9-10 exemptions if the children are under 16.
Still remember you only have 2 months of this income on your 2013 return if you just started this job. What you do now may have to be reworked at the beginning of next year depending upon circumstances. In your shoes, I would be at a tax preparer office as soon as I had my papers in order. Even if you think your kids are your tax claims as custodial, the IRS rule is first filed gets the credit and the later filer has to dispute the claim.
Hope this helps!
Modulo the usual “I am not a tax professional” disclaimer:
You should be able to claim at least four exemptions form withholding if you have three minor children residing with you who receive financial support (or even if any of them are full-time students under, I think 24 years of age, and get at least half their financial support from you: one for yourself, three for the children.
If you itemize deductions, you can also estimate additional exemptions from withholding on the basis of estimated deductions. If you can get a really good handle on your tax liability for the next year, you can even claim one more than the standard calculation method suggests, then ask for an additional amount to be withheld so you end up owing whatever you could conveniently pay in April (up to 10% of your tax liability, but not more to avoid penalties), rather than getting a refund.
You should have been given a W-4 to complete, the purpose of which is to give the employer ballpark amount to withhold.
2 points to remember:
Your tax liability is the same regardless-it’s pay me now or pay me later
If you intend on being an Obamacare scofflaw make sure you have no refund
Take your last year’s tax return. Pay at least the amount of last year net income and other taxes plus 10%. This is exemption before a penalty is incurred for not paying your current year taxes in a timely manner. The remainder of your taxes will be due on April 15.
Review Form 2210 for the rules and other exemptions.
You can adjust your tax withholding with Form W-4, but I would advise you to have a tax accountant help you or review your calculation. It is late in the year and there may already be more than the minimum tax withheld for a W4 adjustment to work for this year. The W4 may need to be revised again for the 2014 year.
Don’t worry. You will make it all back on your ObamaCare subsidies.
Here’s some tax advice: hire a REAL accountant - one who will charge you REAL money - not some doofus from down the street.
Hire the BEST accountant you can POSSIBLY afford.
It makes a colossal difference.
That’s all.
Now you are free to ignore my advice.