Christoph writes in:
Since last fall, my gigs have been getting more and more frequent, and I have even been lucky enough to land some longer jobs. However, I have been noticing that as a job gets longer, there seems to be a larger percentage of my paycheck being taken out by taxes.
I have done research and have been told that “1” is the best number of claims to fill out on my W4 for my current situation. However, I was wondering if I were to put “2” on my longer jobs, and keep “1” on shorter/day jobs, if that would screw me up when tax season rolls around again. Do you have much experience in this end?
It’s great to hear that you’re working! I love to hear that from my readers.
First of all, here’s a trick for everyone, not just PAs: go to the IRS website and download the W-4 pdf there. You can fill it out once, and just print out copies every time you land a new show. Every show has slightly different start work, but for a given year, the W-4 is the same everywhere.
As to what you should claim, that’s a tricky question. It doesn’t have to be what you’re actually planning on claiming when you do your taxes next week
The more allowances you claim now, the less taxes they’ll take out of your paycheck, and the more you’ll owe on April 15.
Conversely, if you put a low number (say, 0), they’ll withhold{{2}} more than you’ll eventually owe, and you’ll probably get a refund on April 15.{{3}}
A refund means you gave the government an interest-free loan for around 16 months. A refund is not “extra cash.” It’s “money you should’ve gotten in the first place.”
My advice is to put the actual number of dependents you have; if you’re single, and no one claims you as a dependent, that number is 1. (If your parents still claim you as a dependent, write 0; you could trigger an audit on them if both you and they claim you as dependent.)
If you don’t mind owing the government in April, put 10. Again, this isn’t an extra cost; this is paying back an interest-free loan. Just make sure you plan for that.
[[1]]Actually, I hope you haven’t waited this long to do your taxes
[[2]]Is that really how you spell “withhold”? Jeez, how many words have two H’s next to each other? That’s like finding a word that ends with “gry.”[[2]]
[[3]]I am not a tax accountant. Like all advice from untrained people, you should probably take this with a grain of salt. Check with a tax advisor; or at least use Turbo Tax.[[3]]
