You are clear, and I understand your statement. What we are missing each other on the main theme. I describe altering the standard deduction above, but the most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year (spread across six months’ paychecks) would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...(and still getting this year’s) You are envisioning a loan, to be paid back. I’m describing an advance on a future discount, so to speak. A discount you get every year, so this year you get it twice, next year none. Not a loan, just early.
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4
You are clear, and I understand your statement. What we are missing each other on the main theme. I describe altering the standard deduction above, but the most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...(and still getting this year’s) You are envisioning a loan, to be paid back. I’m describing an advance on a future discount, so to speak. A discount you get every year, so this year you get it twice, next year none. Not a loan, just early.
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4
You are clear, and I understand your statement. What we are missing each other on the main theme. You are envisioning a loan, to be paid back. I’m describing an advance on a future discount, so to speak. A discount you get every year, so this year you get it twice, next year none. Not a loan, just early.
I describe altering the standard deduction above, but the most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...(and still getting this year’s)
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4
You are clear, and I understand your statement. What we are missing each other on the main theme. You are envisioning a loan, to be paid back. I’m describing an advance on a future discount, so to speak. A discount you get every year, so this year you get it twice, next year none. Not a loan, just early.
The most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...(and still getting this year’s)
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4
You are clear, and I understand your statement. What we are missing each other on the main theme. You are envisioning a loan, to be paid back. I’m describing an advance on a future discount, so to speak. A discount you get every year, so this year you get it twice, next year none. Not a loan, just early.
You are right about more money on your check automatically. The paying back part though we aren't on the same page.
The most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4
You are clear, and I understand your statement. What we are missing each other on the main theme. You are envisioning a loan, to be paid back. I’m describing an advance on a future discount, so to speak. A discount you get every year, so this year you get it twice, next year none. Not a loan, just early.
You are right about more money on your check automatically. The paying back part though we aren't on the same page. They have deductions and credits (both refundable credits and non) that reduce your taxes in different ways. Credits directly reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. Deductions on the other hand, reduce how much of your income is subject to taxes. Deductions happen at the beginning, and set your bracket, then credits come at the end and reduce your tax liability if you qualify for them.
SO what I was mentioning in my first comment above: IF they change the standard deduction then the "repayment" you are talking about would be the liability at the bottom line, but scaled with the brackets that MAY move if you take the standard. The most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4
You are clear, and I understand your statement. What we are missing each other on some things. You are right about more money on your check automatically. The paying back part though we aren't on the same page. They have deductions and credits (both refundable credits and non) that reduce your taxes in different ways. Credits directly reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. Deductions on the other hand, reduce how much of your income is subject to taxes. Deductions happen at the beginning, and set your bracket, then credits come at the end and reduce your tax liability if you qualify for them.
SO what I was mentioning in my first comment above: IF they change the standard deduction then the "repayment" you are talking about would be the liability at the bottom line, but scaled with the brackets that MAY move if you take the standard. The most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4
You are clear, and I understand your statement. What we are missing each other on some things. You are right about more money on your check automatically. The paying back part though we aren't on the same page. They have deductions and credits (both refundable credits and non) that reduce your taxes in different ways. Credits directly reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. Deductions on the other hand, reduce how much of your income is subject to taxes. Deductions happen at the beginning, and set your bracket, then credits come at the end and reduce your tax liability if you qualify for them.
SO what I was mentioning in my first comment above: IF they change the standard deduction then the "repayment" you are talking about would be the liability at the bottom line, but scaled with the brackets that MAY move if you take the standard. The most likely scenario is they would be giving you a reduction in your withholdings as an 'early' refundable credit anyway. So getting it this year would simply remove it from a future year...it isn't owing more taxes when you do that year, it is just getting that credit now...(to tie it all together, they will change THAT year, or again, multiple years', withholding schedule to offset the anticipate the loss of the credit) so you aren't 'paying them back' as you stated, you are just getting it early.
Following up on the paycheck/W4 part if you're interested:
On the exemptions: The IRS dropped them last year, and you don't get to claim the arbitrary numbers you used to. There is no way to file exempt now when you are not exempt. There is no way to lower your taxes either....you used to enter extra exemptions, but that is gone. The only options is to pre-calculate your estimated deductions v. the standard deduction (pg. 3) and/or reduce the amount of withholdings directly related to your child tax credit (see step 3 on the form, it's in dollars now) IF you will make low enough to claim it. For a reference, here is the current W4