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9 thoughts on “Exemptions, Allowances and Deductions: How to reduce your federal tax refund

  1. That calculator is very helpful - thank you! It was much easier to use than the IRS's version, and the resulting computations were almost spot-on. To increase the accuracy of the results, I put my state tax withholdings into the after tax deduction column.

  2. My wife and I both work and we got a large refund for 2013. ($2700).
    Does your calculator for 2008 work for 2014 tax purposes?

    Thank you and I've been following Dave Ramsey for years.

  3. I also recently got married and my wife is going to start a new job soon. So using "1" allowance on each of our W4s suffice? Eventually I want to try and come out even (no returns and no tax liability), but I figured starting with an allowance of 1 would help me land on safe side.
    When we file for returns, I was planning to fill in "2" for exemptions. I also was planning to file Married jointly, would she have to fill out a separate 1040 and fill out exemptions also?

    Any suggestions as to if I am headed in the right direction? Much appreciate the help.

    P.S. The calculator was spot on! Thank you!

    • If you are married filing jointly, you only fill out one tax return. All your income is combined on one return including your deductions (remember, exemptions is only a term on your W-4).

      As far as using 1 for your exemptions, I would probably use at least 2 to start out. 1 will very likely result in a refund (depending on your other deductions like a mortgage or charitable giving). Your wife can start with 1, though.

      It's quite hard to predict things the beginning of a job. The key for you guys is after you file your taxes next year, if you get a refund, divide it by 12 and run the calculator and see how you need to adjust things.

      • Thank you Mike. That certainly helps. That brings up another question regarding tax bracket.
        I started my current job in April and my wife will start her new job Nov 1st. So for 2014 tax purposes, are we taxed on the total pre-tax income amount or the YTD that we get our checks for? I realize it's a stupid question but I just wanted to clarify. Because we are already taxed on the income, so taxing twice doesn't make any sense.

        • Your tax is computed based on your total income before any taxes are taken out. And then you will be credited based on the taxes that were taken out of your paycheck. So you aren't taxed twice. Hope that helps.