I currently file 0 and would like to take additional funds out my check bi weekly in order to maximize my refund. Do I have to have the same amount taken for both federal and state? For ex. Can I have my employer take out $50 towards the fed and $100 towards the State? or do the numbers need to be the same? thanks
Keep in mind withholdings are meant to offset any tax you have due on income earned. The ideal situation is to break even at tax time. Money you withhold is money the government holds interest free. So while you will be increasing your refund, you may be losing out on interest you could be earning in a savings account.
The tax rate by the State is normally lower that the rates for the IRS so you can always withhold less but for your own peace of mind there is no issue withholding the same amount for both state and federal.
Hi. When you adjust the amount of withholdings with your employer there are two separate forms for the state and for the federal. You can adjust each withholding form as you choose. The amounts do not need to be uniform.
Thank you and if i usually get less back from the state would it be ideal to have more taken out of my check for the state or should it ideally be both the same amounts taken out in both fed and state to avoid any issues?
Keep in mind withholdings are meant to offset any tax you have due on income earned. The ideal situation is to break even at tax time. Money you withhold is money the government holds interest free. So while you will be increasing your refund, you may be losing out on interest you could be earning in a savings account.
The tax rate by the State is normally lower that the rates for the IRS so you can always withhold less but for your own peace of mind there is no issue withholding the same amount for both state and federal.