Form W-4 Line 5 1 or 2 ?

[razorxtr]

What is the name of your state? il

re - Posted in correct Forum.

Ok quick question: i cant seem to get a straight answer from anyone i know,

I am starting a second full time job, (have another one on the weekends)

I want to have the least amount of taxes taken out of my paycheck



1. Should i PUT 1 or 2 on line 5 of my W2 FORM?


2. Out of my previous job they were taking out 23% of my pay on tax, Medicare and SS.
i must of put 0 on my W-4 Form, correct?? i don't remember



ALSO:
i also plan on putting about 5k or more into my IRA for 2008 and have about 40k in school loans that i pay interest on.

Anything you recommend? to get the most tax advantage possible?

Im assuming this would affect my filings at End of year.What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state?

[FlyingRon]

http://www.irs.gov/individuals/article/0,,id=96196,00.html

It might be the case that even zero is too big a number.

[LdiJ]

Originally Posted by razorxtr

What is the name of your state? il

re - Posted in correct Forum.

Ok quick question: i cant seem to get a straight answer from anyone i know,

I am starting a second full time job, (have another one on the weekends)

I want to have the least amount of taxes taken out of my paycheck



1. Should i PUT 1 or 2 on line 5 of my W2 FORM?


2. Out of my previous job they were taking out 23% of my pay on tax, Medicare and SS.
i must of put 0 on my W-4 Form, correct?? i don't remember



ALSO:
i also plan on putting about 5k or more into my IRA for 2008 and have about 40k in school loans that i pay interest on.

Anything you recommend? to get the most tax advantage possible?

Im assuming this would affect my filings at End of year.What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state?

Every single job that you have, withholds as if they are your only job. Tax rates are staggered and therefore withholding (if you state the correct amount of exemptions) is generally accurate when you have one job.

However, a second job automatically ends up, when you do your tax return, as being taxed at your marginal (top) tax rate. Therefore you usually need to withhold MORE from a second job, and often significantly more, in order to ensure that you do not end up owing taxes when you file your return.

Therefore, generally, the best way to determine how much needs to be withheld, is to "rough out" your taxes based on what you estimate that you will earn for the year (total, both jobs) and what the tax would be on that total, based on your overall tax situation. Then you subtract your estimated withholding from your first job, from that total, and that tells you what needs to be withheld from your second job to ensure that you won't have to pay. You divide that total by the number of pay periods left to go in the year, and compare that to the withholding tables to see how you should claim things on your W4.

Nine times out of ten, you would end up needing to file your W4 as single with zero exemptions, AND ask your employer to withhold some extra each pay period.

[razorxtr]

The thing that doesn't make sense to me is:

Why give the Gov Money up front, Id rather have the money earning interest and they pay them @ Tax time what ever i owe in taxes.


What do you think of this idea?

[LdiJ]

Originally Posted by razorxtr

The thing that doesn't make sense to me is:

Why give the Gov Money up front, Id rather have the money earning interest and they pay them @ Tax time what ever i owe in taxes.


What do you think of this idea?

That's fine as long as it doesn't result in penalties for under withholding. If the second job isn't going to be a significant amount of your income, it probably won't result in an under withholding penalty.

[razorxtr]

Ok i took the 2008 IRS Withholding calculator
They recommend me

# Job 1 (which has a projected salary of $****): 1 allowance.
# Job 2 (which has a projected salary of $****): 5 allowances.
# Check the “Single” box on your Form W-4.

So i really put a 5 ?

I don't get that.

In the adjustments section i put 8k
5k which i plan on putting into IRA account in 2008
and 3k In interest on student loans.

So i really put a 5 in Line 5 that seems like alot!

[LdiJ]

Originally Posted by razorxtr

Ok i took the 2008 IRS Withholding calculator
They recommend me

# Job 1 (which has a projected salary of $****): 1 allowance.
# Job 2 (which has a projected salary of $****): 5 allowances.
# Check the “Single” box on your Form W-4.

So i really put a 5 ?

I don't get that.

In the adjustments section i put 8k
5k which i plan on putting into IRA account in 2008
and 3k In interest on student loans.

So i really put a 5 in Line 5 that seems like alot!

If you do that, plan on owing a ton of tax at the end of the year, and plan on being penalized for under withholding.