W2 SAYS exemptions/allowances federal: 3

[JNC09 5]

I was about to file our taxes and looked at my husbands w2 and noticed it says exemptions/allowances federal: 3, I looked at last years and it says the same thing. We do not have any children. Mine says 0 for this year and last year. I tried to ask around and google if this is a problem and it seems as long as when we file our taxes we don't claim dependents we don't have we are fine, the issue is we now will pay more than we would if he had just put 2. He has now changed it to 2, and i will keep mine as 0. Honestly, we both don't really understand taxes at all clearly. 

 

Just looking for some guidance and advice on if this is ok, we will be applying for roc soon and i know they will want to see tax transcripts.

 

Thanks!

[EG&XY 144]

You are fine, it only means that you may have over/under paid in taxes throughout the year. So you may owe more not to make up for it, or you may get money back now because they withheld too much during the year.

 

The number of exemptions/allowances that you claim with your employer doesn't have to match what shows on your actual tax filing. Some people choose to tell their employer to use more or fewer deductions when deciding how much tax to withhold from their pay. If you tell your employer to use fewer (such as 0) then they will withhold more money for taxes, so at the end you may get money back because they overestimated how much money you would owe in taxes. However, if you tell your employer to use more (such as 4) then they will withhold less money because they assume that your tax burden will be less, but at the end of the year you may end up owing additional money.

 

In the end it is the numbers that you claim on the tax filing (i.e., 1040) that mater for determining the exact taxes owed, and the amounts of money that your employer withheld throughout the year for the taxes. Some people choose to have their employer to take extra withholding (lower exemption/allowance) so that they can expect to get money back when they file their taxes. But other people prefer to get more with each paycheck (have fewer taxes withheld, higher exemption/allowance) and then owe money to the government when they file their taxes. They key is to not owe too much at the end of the year, if you owe over a certain amount at the end of the year then they may penalize you and add on extra fees for not paying enough throughout the year.

 

See if this article helps explain things further:

https://smartasset.com/taxes/tax-allowances

Edited March 7, 2017 by EG&XY

[JNC09 5]

Great! Glad we don't need to pay a tax man hundreds for one silly error! Will make sure to both have 1 on this years w4! Thanks so much