I'm married, have no children and am the only one working right now. How Many allowances should i fill out on my state federal and city to receive a bigger paycheck and bigger return? right now i have married and and 1 for federal 1 for state and 1 for city. please help and explain the best method on how to proceed. again i want a bigger check and want money back at the end of the year.
thanks
RyanI'm married, have no children and am the only one working right now. How Many allowances should i fill out...
You have a choice -- a bigger paycheck or a bigger refund. Take your pick, you only get one.
Your tax refund is nothing more than getting change at Wally World. You buy $30 worth of stuff and give the cashier a $50. He hands you back $20. Tax refunds are nothing more than the change for what was withheld, it's just that you have to wait up to 16 months for your change from the IRS.
Since you are married and your spouse doesn't work you can claim 3 allowances on your W-4 and will just about break even at filing time. You might get a tiny refund or have a tiny balance to pay, usually well under $100 either way. If you claim fewer than 3 you will get a smaller paycheck but a somewhat larger refund.
The SMART taxpayer doesn't make large interest free loans to the government! Some folks like to brag about getting a $5,000 refund but fail to realize that they loaned the government $100 EVERY WEEK for upwards of 16 months without interest! IMHO, that's major financial stupidity. As lousy as savings account interest rates are, they'd be better off forgetting the refund and putting that money to work for them instead of letting the government have free use of it for over a year.
I hate getting refunds. I aim for a debt at filing time, just under the safe harbor cutoff of $1,000 where penalties would kick in for underpayment. You're free to do as you please, but I'd much rather hang onto my money as long as legally possible, not lend it to the government for no benefit.
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