e-Filing Status

[fulsomjohnson]

Hello there! Appreciate this opportunity so very much!

As of 5/16/23 I am no longer working because of health issues.  My Son is now working and paying the rent and most of the bills.  This will be the first year I won’t be filing as Head of Household with him as my dependent.  I read recently that he could file with me as his dependent.  Is that true?  And would he file as HoH?

Also if someone—anyone—could explain how W4s work that would be most helpful.  I started a job in 2021 and was introduced to the W4 and it was the first year I ever owed taxes.  I was told it was because I didn’t withhold enough.  But why can’t I just go with the standard deductions of the employer and not complete a W4?  I don’t understand how W4s work and why aren’t they easier to understand and complete?  There’s nothing on a form where you can just write a percentage that you’d like to have deducted from your pay.  Seems deliberately confusing and misleading.  Do I have to complete one on a job?

Thank you for your time!

[emina]

Hello, thanks for joining us today!

Regarding your son:

A parent may qualify as a dependent if their gross income doesn't exceed $4,700 (tax year 2023) and the support you provide exceeds their income by at least one dollar during the tax year.

• Social Security income generally doesn't count toward your parent’s gross income, but there are exceptions, such as when your parent has other income from interest or dividends.

You must have provided more than half of your parent's support during the tax year in order to claim them as a dependent. The amount of support you provided must also exceed your parent's income by at least one dollar.
If you paid for more than half the cost of maintaining a home as your parent's main home throughout the entire tax year and you are eligible to claim them as a dependent, then you may be able to file as head of household.

Reference links: https://turbotax.intuit.com/tax-tips/family/steps-to-claiming-an-elderly-parent-as-a-dependent/L34je...
https://turbotax.intuit.com/tax-tips/family/guide-to-filing-taxes-as-head-of-household/L4Nx6DYu9

[emina]

When it comes to the w4 form, I understand it can be confusing. IRS says: Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. Consider completing a new Form W-4 each year and when your personal or financial situation changes.

I am thinking that the reason you owed could be that there was no federal tax withheld based on your filing status, and your income was to high to qualify for certain credits as a HOH. Or your dependent's situation didn't allow for any credits that usually cover the tax due in these situations.

There actually is a section in w4 form that allow you to make additional deductions, called 

• Any supplemental withholding you want for each paycheck 

Here is a detailed link that talks about w-4 and the withholdings.: https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-a-w-4-form/L2NapDzX2

[fulsomjohnson]

Thank you so much for your response, Emina!  I’ll go over this information with my Son.

[fulsomjohnson]

Thank you again for your help, Emina!

I called in recently to TutrboTax with still lingering questions about the W4.  I was told by the young man who helped me that they didn’t really mean anything or change anything as far as the employer was concerned.  All the W4 really did was make the employer aware that I was also withholding.  In other words…and according to him…the W4 had absolutely nothing to do with the employer’s withholding.  Which again is quite confusing because if that’s the case why does one need to be completed at all?  
And why did this start?!  Why are we suddenly required to complete W4s and must a person complete one?  Is it legally required to do so?  Just don’t understand why with everything so confusing in this world why add something else that now messes with my money?!  The one thing a lot of folks look forward to each year is a tax refund.  Now a W4 is robbing folks of that?!  I can’t….

(My sincerest apologies.  I realize I went on a bit but with everything I’ve read still I’m not understanding the point of this W4 and why it’s now necessary.)

[emina]

I understand, no worries. So the employer is in charge of withholding and paying in the social security and Medicare part. That is a requirement and is employer's responsibility. When it comes to federal withholding, it is up to you to let your employer know, by using the form w-4, how much federal tax you want withheld from your paycheck. This is your responsibility. If you do not withhold enough, you will owe, if you take out too much, you will get this money back as a refund when you file your taxes. 

If you fail to provide a w-4 to your employer, they are required to withhold your federal taxes at a single tax rate, which is the highest. 

Some people, like myself 🙂 like to withhold a little extra, and that way I get a higher refund at the time of filing my tax return. Some people like to hold on to their money, and pay to the IRS when they file their return. The down side of this is that there may be penalty involved with this. Either way, you still end up paying the same federal tax amount based on your filing status, income and dependent's situation. w-4 form is just a tool to help you plan ahead. 

[fulsomjohnson]

Thank you.  That makes some sense to me.  What I need to know now is how I go about editing my W4 because I was told by my former employer I can no longer do so through them because no I’m no longer employed by them.

Is there a way to edit my W4 directly through the IRS?

[emina]

w-4 tells your employer how much federal tax you want to be taken out of your pay check. If you are not employed, there are no pay checks to take the federal taxes out of. Next time you do start a job, you would be able to file a new form. 

[fulsomjohnson]

Thank you!  I worked four and a half months into this year though.  I completed a W4 for this year also.  Nonetheless it needs to be edited to direct that 10% of my earnings be withheld.

I can’t make the edit with my former employer so is there a way to edit that information and with whom would I do it and how do I go about it?

[emina]

There is no way to go back. If your income was high, and you expect to owe over a $1000, you might consider estimated tax payments. There is only one left for 2023. But this is only if you think you are going to owe, based on the income you have and the standard deduction. 

Generally, you must make estimated tax payments for the current tax year if both of the following apply:

• You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
• You expect your withholding and refundable credits to be less than the smaller of:
  • 90% of the tax to be shown on your current year’s tax return, or
  • 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

You may send estimated tax payments with Form 1040-ES by mail, or you can pay online, by phone or from your mobile device using the IRS2Go app. You can also make your estimated tax payments through your online account, where you can see your payment history and other tax records. Go to IRS.gov/account. Visit IRS.gov/payments to view all the options. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.

[fulsomjohnson]

Alrighty then!  Thank you again!

Have wonderful remains of the event and your day!