How many allowances should I claim on my W-4?
This is a loaded question with many, many answers. First off, let me explain to you I am not an accountant. I have, played the allowances game and have won, but more importantly been burned. I do recommend contacting an accountant before using anything I say, or for that matter anything anyone else tells you. You have to understand where you sit on the IRSs income scale. If you are working as a manager at McDonald's, you could slide one or two allowances in you favor, If you work say, in an office, doing okay for yourself, have a house to write off, a family you could probably do the same. If you are a low wage earner starting out, again it may be possible. Here is the catch, if it goes wrong (Like mine did.) You will owe the IRS. A penalty that in some cases can as much as a quarter of what you owed if you can not make that payment on time plus interest. If you are not paying enough to the IRS throughout the year you can also be penalized for that. If you have to make payments, interest is charged on the principal, and the penalties. My mistake cost me $40,000.00! I cant stress to you enough talk to an accountant, or tax attorney. You will be better off.