How many allowances should I include on my W4 to break even or owe very little taxes and get more from my checks?

Here's the whole breakdown:

I just left a job where I accumulated 9 months of taxable income, I am now starting a 6 month high-paying contract job. The contract will be from October 2011 to April 2011. I want to reformat my W4 for this 6 month contract to where I get a lot more of my wages from my check instead of having a ton of taxes taken out I would like to break even or owe VERY little taxes when it comes time to file for that tax year. I'm pretty sure the contract will either be extended or I'll be a permanent employee. Below are the exact amounts and all of my current information so you can better help me out.

Best Buy: Worked from January to October in the 2011 year
Total Earnings: $13,353
Net Pay: $10,123
Exact tax details:
Social Security: $560
Federal: $1,405
State: $935
Medicare: $193
TOTAL W/ change = $3,095.55

On that W4 I had no allowances, 0's all the way across the board.
At filing time I claimed single, Head of Household, 2 dependents, and received a tax credit for college.
TOTAL refund was around 4K.


At the time when I filled out my W4 I put all 0's at the recommendation of my Brother, but I feel that since I am getting paid a high amount I would rather get more of my money NOW instead of in a tax refund.

At the end of the 6 months I will have a total of around $21,000.
I will claim head of household this year, and I will also claim 2 dependents as well.
With all of this information I hope someone can give me a serious analysis and give me honest to truth answers, I don't want to get screwed out of my hard earned money just as much as the next person doesn't, PLEASE HELP!
    It does not matter what allowances you enter on your W4 as long as you will owe less than $1000 in taxes when you file your 2011 tax return to avoid penalties.  The top of the W4 is only a worksheet to help you determine how many allowances to claim, the actual W4 is the one you hand into your employer and you only enter the total number of allownances on Line 5 (no one knows if the total is for you, head of household or dependents).  

    The more allowances and what martial status you choose on your W4 determines how much taxes are taken out of your paycheck.  (For example if you are married you can actually choose to claim Single and zero allowances, that would have more taxes taken out of your paycheck).  You choose what allowances to claim depending on how much or how little you want taken out of your paycheck.

    What you claim on your W4 is not what you claim when you file your tax return.  When you file your tax return you would enter your right filing status and number of dependents.

    If you already have enough taxes taken out for 2011 then changing your W4 now would result in no taxes taken out of your paycheck for the remaining year BUT since the calculator is only determining your results for 2011 tax year you would want to go back and enter your information for 2012 (when it becomes available) to make sure you are paying enough in taxes.

    For more information on Tax withholding see publication 505
      This is a User to User forum, no one here should tell you exactly what to claim on your W4 because they could be wrong, you can go through the W4 interview through TurboTax or use the IRS withholding calculator both can give you an idea on what you should put on your W4.

      To go through the interview in TurboTax (you need the desktop version because the online version is shutdown):

      - Federal Taxes Tab
      - Other Tax Situations
      - Other Tax Forms
      - Form W-4 and Estimated Taxes – click Start or Update
      - On the Adjust How Much Tax You Pay - click on the Yes button to change your withholdings on your W-4
      - On the Review Your Estimates? screen click the Don't Review Now button if you don't want to go through the estimated taxes interview.
      - continue through to enter your information

      To use the IRS withholding calculator,,id=96196,00.html

      Also the following is the W4 form, instructions and a worksheet
      • I used the calculator and that seemed to clarify things a bit, but my last question is does it matter which allowances I use? I could have 5-6 allowances but that would make me owe taxes. What I mean is like they have head of household allowance which I am head of household, and they have if no one can claim you as a dependent allowance, and are you single with one job allowance. I'm just not sure if it matters which 2 allowances I choose. Explain that to me and if it matters or makes a difference. Please read my results below for clarification:

        Based on the information you previously entered, your anticipated income tax for 2011 is $79 If you do not change your current withholding arrangement, you will have $3,160 withheld for 2011, resulting in an overpayment of $3,081 when you file your return. If you want your withholding to more closely match your anticipated tax, adjust your withholding on a new Form W-4 as follows:

            For the only job you entered (which has a projected salary of $7,040): 2 allowances.
            Check the “Single” box on your Form W-4.

        Assuming these recommended allowance(s) are in effect for the rest of 2011, your expected refund should be about $2,725. Following this recommendation will ensure that the amount withheld from your wages will cover all of your projected tax liability while minimizing your refund.

        Caution! The recommended number of allowances will result in no income tax being withheld from your pay (because your year-to-date withholding is already sufficient to meet your anticipated tax). Therefore, you should analyze your withholding again at the beginning of 2012 (or anytime there is a change to your tax situation). If you do not check your withholding at the beginning of next year, you will likely be underwithheld for 2012.
      Will you be getting a W-2 or a 1099 from the contract job?  If a 1099, you're going to owe self-employment tax as well as regular tax.  Do you itemize or take the standard deduction?  How old are the dependents?  If you're using the desktop version of TT (as the icon in your post indicates), there's a What If module that you can use, although it is based on 2010 (not 2011) tax law.  Keep your state taxes in mind as well.
      • I will be receiving a W2 only. Also, Standard deduction. Please help!
      • Since we don't know what other income, deductions or credits you have, your best bet is to do a What If scenario yourself.  Remember, only 2-3 months of 2011 will be at the new pay rate, but you may end up in a higher tax bracket as a result.
      • I appreciate you trying to help, but the whole point of asking on the site is because I do not know:-)...if you could try your best with what I provided I would appreciate it...
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