The IRS Audit Blog

Archive for February, 2007

Question: W-4: Married-0 vs Married-0 at a higher Single rate + Additional w/held form paycheck?

I had made a mistake on my W-4 last year and thus owe the IRS quite a bit this time around, so I’m trying to figure out how much to withhold from my paycheck.

From paycheckcity.com ’s W-4 assistant page (http://www.paycheckcity.com/W4/w4instruction.asp), I had filled it out duly and came up with 0 allowances but w/ a small amt. additional to be held from my paycheck.

I don’t mind if I add an additional amt. to be taken out each paycheck however, I’m not sure if I should check the box “Married” or the “Married, but withhold at higher Single rate”.

If I have an additional amt. taken out plus file as Married 0 at the Single rate, would that be playing it too safe or just file as:

1. Married 0, nothing witheld.
2. Married 0, and higher rate & nothing withheld
3. Married 0, and higher rate plus a little witheld?

I seriously do not want to end up paying more in 2009 then I will be fore 2008!

Answer: Well, it will depend on the amount you wan t/need to be withheld. On the up side, you can change your W-4 anytime you want. Literally every pay period if you wanted (that would make you popular in the account department at work however

So if you did a review of your financial situation in the middle of the year, and made a “mock” tax return and saw you were not having enough withheld, you can change it!

In the order of most withholding:
Single
Married, but withhold at the higher single rate
Married

Each exemption you add on to the end of each status will reduce the amount of taxes taken out, just as any extra withheld will increase the amount.

The W-4 does not have to match your tax return, so if you want the maximum amount of taxes withheld you can check Single 0. (My W-4 and my husband’s both have Single 0, even though we file a joint return. I would rather have the maximum taken out during the year, to make sure that the chances of owing money are severely reduced.)

Remember, the idea behind the W-4 is to try and get the ‘perfect bottom line’ at tax time: You don’t owe the IRS and the IRS doesn’t owe you.

What to know about new HIRE Act

To promote employment, the HIRE Act rewards businesses hiring workers.

Basic Explanation of W-4 tax Form : Deductions & Adjustments Worksheet: W-4 Tax Form

Question: will the IRS audit me?

This tax season I will be getting the biggest refund that I have ever received, about two thousand extra due to not working as much and the Additional child for the EIC, my question is because of this will this send the IRS an red flag? This year I only made about 15,000 compared to about 22,000 in the last five years, but because of this I will getting a little extra, will they think that something isn’t right?

Answer: As long as the additional child that you’re claiming for the EIC is your child that you have previously claimed an exemption for or who was born in 2009 the odds of an audit are slim. If this is a child that is not your child, such as a niece or nephew, then the odds of an audit are pretty high.

The size of a refund isn’t an audit trigger, but what you claim that triggers the refund may be.

The ATO bomb

The taxman is bearing down on big business like never before. Adele Ferguson and Stuart Washington investigate.

Federal Reserve Transparency Act HR1207 Ron Paul – Dprogram.net

Mother and Small Child Trapped in Car for Nearly 4 Hours

Sheriff’s Deputies in Boone County say a young woman trapped for several hours in her car Monday night has been released from the hospital.

‘Mauritius not a tax haven nation’

Denying the charges that double tax avoidance agreement (DTAA) has enabled some people to use Mauritius for reinvesting Indian money back in India to save taxes, vice-PM of Mauritius Rama SITHANEN dismissed the allegation that Mauritius is a tax-haven nation.

Question: Will we get a rebate through DD?

I filed with Turbo Tax online but it was free for us. However they still asked for our debit card information and so I gave it. We had to pay like $4 to the IRS so we paid it via direct deposit. When I checked my bank account (IRS DES:USATAXPYMT) took $4 out of our account. Our last two SSN is 43. Do you think we’ll get ours DD by May 9? Or should we expect a paper check?
I did provide my routing # and acct # to pay for the $4 we owed. The service was “free” but we gave our debit info just because it prompted us to.

Answer: TurboTax probably billed your debit card for their services — or so I’m guessing. Since the government took the money you owed via direct debit, you should receive your rebate via direct deposit to the same account.

Turning your tax refund into an I Bond is smooth move

Admit it: You’ve already broken your New Year’s resolutions. A half-eaten chocolate truffle cake sits in your fridge, your new running shoes are still in the box, and you haven’t saved a dime.

Handling a 500 series IRS rejection Code