How Do I Stop Getting A Big Tax Return?

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[GenExDividendInvestor]

Listen to Dave. All will be well. I did exactly what he said and went to my payroll dept at work and asked them to withhold a specific amount because the exemptions amount was bogus.

[faST]

The IRS actually has a calculator on their website and you give them all your info like earnings, mortgage, bills, debt and so forth. It will reccomend you an option to get you close to no return.

[moon-]

I was just thinking about this today while I was at work! You know how to read minds, Dave! I swear it!

[artbigotti]

I’m no tax expert; however, I believe Dave is using the wrong term. On your W-4 with your employer, you claim “allowances.” On your actual tax return with the IRS, you claim “dependents.” Your W-4 allowances do not reduce your tax liability. They simply allow you to adjust your tax withholding. (Only mentioning this because there seems to be some confusion when he’s using the term “dependents” as you cannot claim more dependents than what you actually have. Yes, I am getting technical because this was a technical question and words matter.)

[sarahpollick]

My husband and I have been claiming 0 and single forever.... now I found Dave and realized our money was just set aside until income tax time.... we thought of it as a big bonus... it's not, it was our money the whole time!! Already changed my info in payroll to married and 4 we will see how it goes!!

[cfoskeeter]

A pet peeve of mine is people who refer to their refund a "return". The return is the form you file.

[of]

Do your taxes in advance on one excel (most taxes are quite simple). Just use 2020 brackets and deductions and credits.

Next tab over take all your first couple paychecks (if MFJ) in January and extrapolate out where you will end up after 26 checks in terms of cash paid. If you are going to over pay increase your number of exemptions each paycheck until you get close.

Or you can look up the actual table and formula they use to determine the withholding. It’s an IRS publication

[SnakeonFlag]

Need an updated version of this for the new 2020 W-4

[ColinJ]

I claim what the W-4 describes to claim. 7 all totaled with my specific family details. That still leaves about $600 refund, which is a comfortable cushion to not end up under-paying the IRS if something changes mid-year, but not so much overpaid that it actually matters.

[mle]

I still need to get better at this, myself. I paid $381 one year, then paid $87 the next year (getting closer to zero...) and then got a refund for $1202 the next year lol. I need to adjust my math a bit better.

[canman]

Keep on claiming everything you possibly can and let them come to do all the working out for you.

[mattenderle]

I claimed 9 one year. I didn’t get penalized and I cut a check to the IRS bc I wanted all my money! It was nice to have that extra monies.

[Sahn_Cho]

What’s the difference between claiming dependents and claiming exemption if I’m trying to break even and I have no kids?

[flynomo]

The new w4 is now longer and more difficult to complete.

[dks]

Tax 'return' is what you file. Tax refund is getting your excess payments back to you.

[ProSkillGuides]

Love your channel Dave and all the insight you have! Inspired me to start one of my own!

[colegonyea]

Could someone explain this to me like I’m 5. Why would you not want a refund? Is it because since it’s getting taxed, the amount that you’re getting back is less than you can have made?

[lardook]

Learn from new zealands tax system, tax codes that withhold the right amount automatically.... cut down on forms and simplify the dependants versus working for families....

[jojohns]

My friend was getting 6-8k tax refunds each year... and I was like... why so much?

[marcusarelius]

Just play with the # of dependents each year until it gets to the number you're comfortable with.