Should I claim “9″ on my W-4 for 6-7 months in order to pay off a credit card?
Question by jagercrow: Should I claim “9″ on my W-4 for 6-7 months in order to pay off a credit card?
I make a little over $ 40k a year. I currently claim single and “0″ with no deductions. My federal refund for 2009 is $ 1,250.00 plus the $ 400 “Making work pay” credit totals $ 1,650.00. I did the math. If I claim “9″ I will get $ 240 more on my paycheck every two weeks. This will enable me to pay off my credit card in 6-7 months. I would immediately change it back to “0″ once the card was paid off. I’m ok with owing some money to the IRS for 2010. Even if it is a little over $ 1k. Does anyone know how much the underwitholding penalties are? Would my tax liability even be over $ 1k if I change it back to “0″ after 6-7 months? I would think it would either break even or I would only owe so much…Any advice would be appreciated. Thanks…
Best answer:
Answer by tro
you have already figured it out and if it works for you, no harm done
What do you think? Answer below!
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My husband has claimed “9″ on his W4 the entire time we’ve been married (16 years) and we never have to pay taxes when we file (we get refunds of what we did pay). His payroll dept actually suggested he do this many years ago in order to cut down on the taxes taken out of his paycheck. I didn’t realize there was an under-withholding penalty, but if so, it has never applied to us. We don’t make as much as you do though and we do have 4 dependents.
I would go 6 months at 9 and the rest at 0 just to be on the safe side, I’m not sure of the “making work pay” is going to be around for another year, I love it. but maybe there would be another credit to use.