1

I am starting a new job on 1/9/2012 where I will be making significantly more money than I did in 2011. Further, I do not have certain deductions that I have in the past (mainly $12,000 per year in tuition expenses to write off).

I am looking for a resource where I can determine how to select withholding allowance to set the amount of a rebate/payment near to $0 come tax time in 2013. My goal is to optimize contributions to 401k as well as setting the proper withholding allowance to maximize the amount of my semi-monthly check and get as close to $0 come tax time in 2013 as possible. My situation is fairly simple. Assume interest expense on my mortgage as the main deduction with no other income or special situations.

Is anyone aware of a good online (preferably free) resource for tax planning in this way?

3

The IRS has a calculator for this purpose.

  • 1
    +1 - yup, IRS is getter better at offering these tools on line. – JTP - Apologise to Monica Dec 28 '11 at 3:44
  • This is useful for my current position but does not answer my question. I am looking for a tool to determine how to select withholding allowance to set the amount of a rebate/payment near to $0 come tax time in 2013. – strimp099 Dec 28 '11 at 17:56
  • @strimp099 Check out publication 919, which is linked from the IRS site in my answer. Use caution... If you play it too close, you'll pay a penalty for minimal benefit. – duffbeer703 Dec 28 '11 at 20:14
  • An exemption is worth $3800. In the 15% bracket, this is like saying withhold $570 over a years time. The W4 will get you to the nearest whole number of exemptions. To get closer than this, you need to adjust the W4 during the year. e.g. If 2 get you back $250, drop to 1 mid year. Nailing it to +/- $10 is hardly worth the effort IMNSHO. – JTP - Apologise to Monica Dec 29 '11 at 17:15
0

If you use tax software to prepare your taxes, most packages have a planner for the next year. You could use that.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.