Forgive me for being ignorant. I could never figure out the whole tax exemption number system.

I am not married and have no dependents is it okay to claim "0" or should I be claiming some other number to my advantage?

thanks

 

First, you are not talking about exemptions; you are talking about allowances.

An allowance is a number you put on your W-4 form and is used by your employer to determine how much tax to withhold from your paycheck.

An exemption is a number you put on your 1040 form and is used to reduce the amount of tax you have to pay.

If your withholding is too low you'll owe additional tax on April 15; if it is far too low you'll owe penalties as well.

If your withholding is too high you'll get a tax refund, but you'll lose the use of that additional money for some portion of the tax year.

The number of allowances you should claim is the number that results in withholding the amount of tax you want withheld. You may have to fiddle with that number a bit to arrive at the appropriate value.

 

if you choose 0 allowances, you're almost guaranteed a refund as you will overpay.

If you have no special deductions and choose 1 allowance you'll get more in your check but a lower refund.

I am single with no kids and I put in 2 allowances. I got back $20 last year. One year I had to pay $500, though.

 

Thanks for the clarification!

 

http://www.irs.gov/individuals/page/0,,id=14806,00.html