Video instructions and help with filling out and completing Which Form 2220 Allowance

Instructions and Help about Which Form 2220 Allowance

Yo yo yo CPA strength here strong CPA in guy name you know what I'm saying this is going to be w-4 I've been looking at some other videos about w-4s how to fill them out and everything so they're out there excuse me but I just want to quickly try to explain what what the big view of what a w-4 is it just affects how much federal withholdings that your employer takes out of your paycheck that's all the W that's all the w-4 is the your employer is trying to figure out how much how much federal withholding how much federal withholdings your employer takes out of your paycheck and they're trying to figure that out matched up with the allowances they're trying to figure out that you are gonna owe X amount of taxes at the end of the year and so let's say let's say we figure out all of your let's say we figure out you are all of your different incomes from all of you all of your different income streams and then we figure out all your deductions whether you itemize standardized deduction then we figure out your your credits other taxes you might owe then you're gonna have your tax liability so let's say o your tax liability is a thousand dollars you own the government a thousand dollars that is gonna be matched against your federal withholdings so that's that's what we're trying to get so we would like to see you have about zero we'd like to see if you own tax liability of a thousand dollars we'd like to see your federal withholdings equal a thousand dollars and you would owe nothing when you're filling out your w-4 it's basically there's a there's the sheet that you turn in to your employer and that basically you know has your name social address and it has number of allowances I believe it's like light number five and then there's a couple pages of worksheets to figure out how many allowances I just want you to know it just depends on federal Holdings so the higher number of allowances you have let's say the highest you can put is nine where let's say you have four or five allowances that means you know you're expecting maybe you had you have dependents so you're gonna have more deductions you maybe you're gonna get a child tax credit or some credits so you're gonna have higher higher amount of allowances now this is this is kind of counterintuitive this is this is the part that is hard to grasp the more the higher number of allowances the less federal holdings are going to take out because they figure your tax liability is going to be less so you have more allowances because you have more things that can be deducting that means your tax liability is going to be less so they're gonna take out less federal holdings conversely lower allows a lower number of allowances meaning if you put zero or one well you're they're saying you don't you don't have you don't have any any credits coming you don't really have any dependents you don't have you're not gonna expect to get a child tax credit lower number of allowances is going to be more federal withholdings they're gonna take out of every paycheck zero allowance if you put zero allowances on your w-4 they're gonna take the highest amount of federal withholdings if you put nine allowances they're gonna take out the lowest amount of federal withholdings so all it is is whatever number whatever number you pick or whatever you know you do the worksheet whatever number you land on it's all it is is the amount of federal withholdings that your employer is going to take out now people get people owe money all the time every here people get refunds every year it's not the biggest deal I would say you put you know what do you want do you want do you want a refund do you want to break even do you want to go a little bit pick what you're gonna pick you can always change you can always change the number of withholdings on your w-4 so just stick with what you got and then if you don't like the results when you do your tax return you can switch your w-4 but all the w-4 is is the amount of federal withholdings they're gonna take out of your paycheck every week that's all the w-4 is I know it can be kind of confusing filling it out people stress out about it it's it's not that big of a deal just follow the worksheet and you know common commonly usually usually if you have one job say you make $400 a week one job it's like twenty thousand dollars a year if you put one allowance you'll get pretty close to breaking even if you have zero allowances with one job making twenty twenty-five thousand a year you'll get a little refund back maybe a thousand bucks maybe eight hundred it depends if you put two allowances you're gonna owe a little bit of money so you just got to toggle it back and forth because there's so many so many variables and if you do if you do your tax rate if you have a job you know your spouse has a job you've got this coming in this come in you don't like the amount of you don't like whether you got a refund or you owe money you can switch your w-4 the next year it's just it's not a big it's not a huge deal there's no need to really stress out about it you're not gonna do it wrong no one's gonna come after you you're doing it wrong you just try to do the best you can and then make adjustments if you want