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How to Fill Out a W-4 Correctly

Filling out a W-4 is less mind-boggling than you think.

One of the first things you have to do when you get a new job is filling out a Form W-4 [Employee’s Withholding Allowance Certificate]. It is essential to complete a W-4 correctly because it determines how much tax will be withheld from your pay and how large your tax refund will be.

The first half of the form is pretty easy. You just have to fill in your name, address, and marital status.

Then you have to figure out how many allowances to claim. This number will determine the amount of your withholding.

Number of allowances to claim

Generally, the number of allowances you should claim will correspond to the number of personal and dependency exemptions you can claim on your tax return, but this is not always the case. Claiming zero allowances will result in the maximum amount of tax withheld. Every additional allowance you claim on top of that means that a little less tax is withheld. Continue reading “How to Fill Out a W-4 Correctly”

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How to Claim the Child Tax Credit

Parents deserve a bit of a (tax) break now and then.

As a busy parent, filing taxes can be found on the To-Do list between Monday’s soccer practice and Thursday’s parent-teacher conference. Do yourself a favor this year and see if you are eligible for the Child Tax Credit. Tax credits are great because, unlike deductions, they reduce your tax bill dollar-for-dollar. That means, a larger tax refund for you and your family!

What is the Child Tax Credit?

The Child Tax Credit offers a credit of up to $1,000 per child to qualifying taxpayers. It is only available to those who can claim a child as a dependent and meet several other requirements.

There is no limit to the number of children you can claim using the Child Tax Credit, however, claiming lots of kids may subject you to the Alternative Minimum Tax (AMT).

Who can claim the Child Tax Credit?

In order to claim the Child Tax Credit, the child in question must: Continue reading “How to Claim the Child Tax Credit”

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How To File Taxes in Two Different States

Do you carry the burden of dealing with multiple states on your tax return?

For most of us, filing a state tax return is just another step in filing a federal return. Your tax-filing software just transfers your information to your state’s return and you’re done within minutes.

But what if you moved to a different state during the tax year? What if you worked in a state other than the one where you lived? What if you worked in multiple states? Suddenly filing state taxes becomes a little trickier and it may involve filing taxes in two different states.

Basically there are three different types of state tax returns that you need to worry about:

  • Resident
  • Part-Year Resident
  • Nonresident

Continue reading “How To File Taxes in Two Different States”