having zero federal withheld?

[makingithappen]

If you expect a refund due to an assortment of credits, would you be comfortable have nothing withheld? I ran some numbers and it looks like we would still get ~6k back but I know tax law is liable to change. Is 2013 locked in? Should we have enough withheld to cover our actual tax liability not counting the credits or get all the take home we can each month?

[Deleted]

In your case, I would. If you are getting that kind of money back from the government, no need for them to hold more.

[Deleted]

How did you run these numbers?

Not all of the tax credits that are in place right now will be the same next year. A lot of tax credits are temporary or they have a max number of years that you can claim them. If you took this into account and didn't include any credits that may not possibly exist during next year's filing season, then go on with your bad self.

[makingithappen]

Jan 25, 2013 14:29:35 GMT -5 jenny1980 said:

You would withhold zero and still get back$6k? What kind of magic credits do you have?

Ha enough pretax deductions to get my income a decent amount under 30k plus a h with tax free income and 2 kids. I'd rather have a higher income and less refund but it is what it is.

[Deleted]

Even if your math is right, from the W4 form it looks like you can only declare yourself exempt if:

For 2012 you had a right to a refund of all federal income tax withheld because you had no tax liability.

For 2013 you expect a refund of all federal income tax withheld because you expect to have no tax liability

Was that the case?

www.irs.gov/publications/p505/ch01.html#en_US_2012_publink10007250

[Deleted]

Jan 25, 2013 14:42:28 GMT -5 makingithappen said:

Jan 25, 2013 14:29:35 GMT -5 jenny1980 said:

You would withhold zero and still get back$6k? What kind of magic credits do you have?

Ha enough pretax deductions to get my income a decent amount under 30k plus a h with tax free income and 2 kids. I'd rather have a higher income and less refund but it is what it is.

What kind of magic income does he have?

[Deleted]

Jan 25, 2013 14:47:15 GMT -5 v said:

Jan 25, 2013 14:42:28 GMT -5 makingithappen said:

Ha enough pretax deductions to get my income a decent amount under 30k plus a h with tax free income and 2 kids. I'd rather have a higher income and less refund but it is what it is.

What kind of magic income does he have?

Deployed military?

[Deleted]

Jan 25, 2013 14:47:48 GMT -5 @iheartcosmos said:

Jan 25, 2013 14:47:15 GMT -5 v said:

What kind of magic income does he have?

Deployed military?

Interesting -- I never knew that!

[makingithappen]

Jan 25, 2013 14:45:40 GMT -5 v said:

Even if your math is right, from the W4 form it looks like you can only declare yourself exempt if:

For 2012 you had a right to a refund of all federal income tax withheld because you had no tax liability.

For 2013 you expect a refund of all federal income tax withheld because you expect to have no tax liability

Was that the case?

www.irs.gov/publications/p505/ch01.html#en_US_2012_publink10007250

I wasnt going to check the exempt box. I originally changed my w4 to married and 3 and noticed nothing was withheld for the first paycheck if the year. I then changed it to married and 2 and had money withheld but I'm wondering if the other would be smarter

[kadams767]

Jan 25, 2013 14:48:25 GMT -5 v said:

Jan 25, 2013 14:47:48 GMT -5 @iheartcosmos said:

Deployed military?

Interesting -- I never knew that!

This might be my flameful confession.  I think it's crazy that this income isn't taxed. 

[sometimesrunner]

I don't have any federal tax withheld. H's withholding more than covers our tax liability so I don't need any.

[makingithappen]

Jan 25, 2013 14:47:15 GMT -5 v said:

Jan 25, 2013 14:42:28 GMT -5 makingithappen said:

Ha enough pretax deductions to get my income a decent amount under 30k plus a h with tax free income and 2 kids. I'd rather have a higher income and less refund but it is what it is.

What kind of magic income does he have?

Va disability and GI bill living allowance

[makingithappen]

Jan 25, 2013 14:48:25 GMT -5 v said:

Jan 25, 2013 14:47:48 GMT -5 @iheartcosmos said:

Deployed military?

Interesting -- I never knew that!

Working as a contractor overseas is also tax free if you stay out if the country all but 30 days. H did that a few years ago in iraq

[Deleted]

Jan 25, 2013 14:49:32 GMT -5 kadams767 said:

Jan 25, 2013 14:48:25 GMT -5 v said:

Interesting -- I never knew that!

This might be my flameful confession.  I think it's crazy that this income isn't taxed. 

I'm on the fence about that.

I think it's crazy that tax credits allow people to get more back from the IRS than what they actually paid in.  I'm cool with deductions, I'm not cool with credits.

Anyways....OP...it sounds like from your financials you would be fine with having no federal income tax withheld, and if you did owe something it wouldn't be much. 

HR shouldn't care and it shouldn't send up any red flags at the IRS.

[mmmomof2]

We used to have zero w/held from DH's regular paychecks since his company withheld so much from his bonus checks. With our deductions/credits it worked out. Of course DH finds out in December how much is next year's bonus is going to be so this works for us.

[awkwardpenguin]

I would withhold zero. You even have the option to have your EITC advanced through your employer, so it's not out of the ordinary in your situation to not withhold.

Tax law is not set for 2013. But it won't change enough that in your situation you'll end up owing taxes.