I am 18 yrs old and recently started a part time job for the 2018 year, never had a job before therefore don't have any tax liability for 2017, and my parents claim me as a dependent. So I asked one of my advisers if it would be ok to I claim exemption from withholding for 2018 on my w4 (i put EXEMPT on line 7) and they said yes because I will only be making about $400 for the entire time that I work (from January 2018 to May 2018). A relative of mine recently told me that it would be best to revise my w4 and change my exemption and claim 1-2 allowances (1 for Line A and 1 for Line D on the personal worksheet of the w4). He said this will ensure that I will not owe the IRS or state any money or have any unintended fines. My pay stubs show that the state income tax ($1.20) are deducted but nothing else and each pay period I only get paid around $38.80.
What it be best to keep my w4 how it is (me claiming exemption from anymore tax deductions) or should I revise it and claim 1-2 allowances. Will it make any difference if I do change it? And will I end up owing the IRS or State any money if I continue to claim exemption for the time that I work and get paid? Thank you so much!
P.s. I am not married nor have any dependents/children and am a full time college student and only have one job.
If you are sure that your total income will be under the $400, claiming EXEMPT is perfectly acceptable- it saves you from filing a tax return to get the withholding back. (I also agree with the relative that you do not want to owe the IRS, but in this case, you will not have taxable income.)
If you are sure that your total income will be under the $400, claiming EXEMPT is perfectly acceptable- it saves you from filing a tax return to get the withholding back. (I also agree with the relative that you do not want to owe the IRS, but in this case, you will not have taxable income.)
I've the same case!! Im graduating high school this summer .I just started a new job and I while I was filling up the w4 form I claimed myself as exempt because I didn't know what to do. This is my first job so I never had tax liability and my parents claim me as dependent. Now what if the total income is something like $20,000? Is there any penalty for claiming myself as exempt if I'm not eligible for claiming myself as exempt ?
Yes there is a penalty, so do not do it. See this:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/individuals/irs-withholding-calculator">https://www.irs.gov/individuals/irs-withholding-calculator</a>