Tax Time

[VETTE_50_TH]

So, tax season is right around the corner, and i need advice. I'm 20 years old, living on my own for now, and work full time. I have read that my parents can not claim me, so i must be independent. Does that mean that i will get most of my tax return back because i didn't make as much as most independents do? I'm very confused on what happens with taxes and being independent. The first few years, i didn't make as much as i did this year, 16000. Where should i go to lookup the tax bracket? Please don't tell me to get a tax advisor, because I've had to do it by myself for the last 4 years.

James

 

[DSM90AWD]

If you have no itemized deductons use the 1040EZ form from the IRS Website

Everyone is entitled to a single exemption to their taxable income for theirself if no one else is claiming them as a dependent (e.g. they provide the majority of your support). On the 1040EZ that equates to $8,750 for the 2007 Tax year for an individual. Your taxable income would be your W2s + 1099s - $8,750 (your personal exemption). So if you made $16,000 total, your taxable would be $7,250. Looking at the tax table in the 1040EZ instructions, your tax burden would be $728. So anything over and above that withheld should be refunded

 

[Defiant]

Crank up your W-2 dependents to at least six. You may as well get the pay as let it sit in a government vault for free.

 

[97GSRyan]

Funny you mention that Def, a friend of mine (who is 19) claimed the maximum possible dependents on his W2. Something like 32 or 36!?

From sheer curiosity, anyone know if that can backfire at tax time? Ex. They don't take enough out and you end up owing the IRS?

 

[VETTE_50_TH]

Crank up your W-2 dependents to at least six. You may as well get the pay as let it sit in a government vault for free.

Haha. But then, thats fraud. Which i dont need any of.

James

 

[wret]

No, you have to even everything out on April 15. The W-4 form is only for employers to estimate deductions and gernerally is not filed with the IRS. Gernerally the estimate of taxes owed is higher than actual and refunds are given after filing the tax forms. Most people think of this an extra pay day or bonus. For those that lack any kind of financial discipline, this may be the only way to save money.

John is right. There would be no advantage for you to use anything but the EZ, and it is as the name implies; EZ. With your W-2 in front of you it takes about 5 minutes.

 

[blcknspo0ln]

Damn I never knew about this, I always paid for someone else to do my taxes. BTW, I'm 22, live at home (so i'm a dependant); so I should be able to use this EZ form?

 

[DSM90AWD]

Damn I never knew about this, I always paid for someone else to do my taxes. BTW, I'm 22, live at home (so i'm a dependant); so I should be able to use this EZ form?

Yes. Unless you have personal deductions (mortgage interest, eduction..etc) or are self-employed, should look at the EZ first. The links I provided above give you all the specifics.

Note that even if you live at home, if noone else is claiming you as their dependent, you can claim the personal exemption. Back in the day I had a deal with my dad thru college as he had income in the highest tax bracket (~50% bracket) to use my exemption and he'd give me money

 

[DSM90AWD]

Speaking of taxes, if you travel and pay a city-wage tax, many municipalities will allow you to file for a pro-rata refund for days away from the office. I travel 10-15% of the year which equates to some real money refunded

 

[VETTE_50_TH]

I've done the EZ form for, this being my fourth time now. Its very quick. I do mine online though. Can't wait until i get my nice big check in my bank account. Time to buy some parts. The sooner the w-2s come, the quicker i buy my parts.

James

 

[4G63_Attack]

IF I remember right. You can still be claim as a dependent until 24-25 year old or so.

 

[VETTE_50_TH]

It wouldn't be smart for my parents to claim me would it? I dont think so, i think i lose money on my return.

James

 

[blcknspo0ln]

Yea, if they claim you, you lose money; but in compensation I believe they get more money. I think that's what John was talking about. So just 'work a deal' with your parents

 

[wret]

Unless your are below the poverty level (and at 16K, you might be), the exemption is the same.

 

[VETTE_50_TH]

Even though i am in poverty, i dont feel like it though. I will just claim myself i guess.

James

 

[blcknspo0ln]

Poverty is just a word. If you're young and you don't have much collateral, 16k can go a long way, especially since you live in PA instead of NJ where they rape on you just about everything.

 

[a_scobel]

All my tax return money's going towards paying off the rest (or most) of my debt. Sucks, but I really have to do it. I'm paying everything with cash from now on!

 

[VETTE_50_TH]

Thats what i say, but i keep using the damn CC, "only one more time." ####ing sucks. I will probably be doing the same thing. I need to pay off debt. Get that off my chest.

James

 

[turbo_punk]

The ez is easy and free, also if your in college like i am i have heard you are suppose to be able to get back a lot of that on your taxs too...

 

[Defiant]

Study harder. Very much harder.