By Burke Brown
While every season brings something to look forward to, I love this time of year, and it always seems to go by way too fast. This has been an amazing year. We have seen a lot of growth and have been able to work with some great companies and great people. Thank you for your trust as we take care of your payroll needs and as always, your feedback is welcome and appreciated. With the growth our goal is to continue to provide the award winning customer service you have come to expect with Payroll Experts.
This month, I wanted to address a common question I hear – What should I claim or what should my employees claim on their W4?
Unfortunately, there’s really no way to answer this question because everyone has a different situation and there are far too many variables. Some of these variables are factors like how much you make, your marital status, how many dependents you have, what deductions you can take on your taxes, and the list goes on and on.
Also, keep in mind that figuring out what to claim is more an educated guess than an exact science since your situation will most likely change throughout the year. In fact, the word “tax” is from the Latin word taxo, meaning “I estimate”. Remember that you’re not alone in your tax claim confusion – in 2007 the IRS reported that roughly 1 in 3 American taxpayers wrote, called, or walked into an IRS office for help, and over 1 million accountants are hired each year in America to help with taxes.
My suggestion is to fill out the W4 as accurately as possible and if you still have questions there is a calculator on the IRS website to help you figure out what to claim. http://apps.irs.gov/app/withholdingcalculator/. Remember, if you claim too many deductions, you may end up owing money at the end of the year, and if you claim too few, you may be lending money until you receive your tax refund.
Albert Einstein once said “The hardest thing in the world to understand is the income tax”. Well said Mr. Einstein!
Thank you and have a fun and safe August!