Beginning to work/tax question

[MarkandCharity 17]

My husband received his approval to work in the US yesterday. I keep hearing different things from everyone. Would it be best for him to begin work ASAP or wait until the new year? Will it make a difference in our tax return?

[Crazy Cat 39,193]

No reason to wait........It would have an effect on your taxes.......but the net outcome would be more money in his pocket..😀

Edited October 5, 2019 by missileman

[geowrian 22,335]

The sooner he works, the sooner he brings in income. The end of year tax refund liability difference may eat into some of it, but by no means does it mean he gets less money overall.

[Moe428 129]

It would mean more money at the end, so why not?

 

If he starts working ASAP, the income tax deducted from his paycheck will be for the annualized salary.  But because he will at most work 3 months of the year, you'd expect to get a big tax return because at that time IRS will only tax on the 3 months income.

[Ontarkie 13,904]

~~moved to Taxes and Finances, from AOS Family K1/K3 - The OP's question is about taxes.~~

[Kürbis&Tannenbaum 20]

On 10/5/2019 at 3:05 PM, Moe428 said:

It would mean more money at the end, so why not?

 

If he starts working ASAP, the income tax deducted from his paycheck will be for the annualized salary.  But because he will at most work 3 months of the year, you'd expect to get a big tax return because at that time IRS will only tax on the 3 months income.

I know this post is a month old but figured I'd add - if you start late in the year, just adjust your withholding. You shouldn't be getting a big tax return, that means you did something wrong. Ideally you file and get $0 back 0 owed... so estimate as best you can with the 2019 withholding charts for your state + federal.

[geowrian 22,335]

37 minutes ago, Kürbis&Tannenbaum said:

You shouldn't be getting a big tax return, that means you did something wrong.

It may not be optimal (letting the government hold your money with no ROI), but is not wrong/incorrect.

[Kürbis&Tannenbaum 20]

6 hours ago, geowrian said:

It may not be optimal (letting the government hold your money with no ROI), but is not wrong/incorrect.

You're being pedantic. To the original point, I suggest that OP and anyone else here should estimate their tax burden and change their withholding to be as accurate as they reasonable can be. Large tax returns are not a good thing. Especially for new workers in the US, they can use all the money they can get, so they absolutely should at least attempt to adjust withholdings to keep more money now.

Edited November 3, 2019 by Kürbis&Tannenbaum

[geowrian 22,335]

Just now, Kürbis&Tannenbaum said:

You're being pedantic. To the original point, OP and anyone else here should estimate their tax burden and change their withholding to be as accurate as they reasonable can be. Large tax returns are not a good thing.

Maybe, but it is correct. For some people, getting a large tax return is not a concern as they have no plans to invest the money otherwise or deal with the extra paperwork and calculations for what may amount to a couple dollars.

[Lebanese23 303]

Question...I recently updated my W4 status at work to married and i was asked if i should add allowance on both federal/illinois, both my husband and i currently work full time and we plan to file jointly for 2019.  When i filed last year, he wasn't working so i added 1 allowance on my federal withholding but kept the Illinois at 0. i just need some push in direction, i definitely do not wanna owe any money if possible. but i feel like my federal withholding has been slashed in half since I added 1.

 

Is it a good idea to add him as my allowance on my federal/Illinois withholding or should i keep it 0. have them take more money? we make fairly the same amount, not sure if our income will impact anything. should only one of us put 1 for allowance.

 

[Villanelle 4,121]

5 minutes ago, Lebanese23 said:

Question...I recently updated my W4 status at work to married and i was asked if i should add allowance on both federal/illinois, both my husband and i currently work full time and we plan to file jointly for 2019.  When i filed last year, he wasn't working so i added 1 allowance on my federal withholding but kept the Illinois at 0. i just need some push in direction, i definitely do not wanna owe any money if possible. but i feel like my federal withholding has been slashed in half since I added 1.

 

Is it a good idea to add him as my allowance on my federal/Illinois withholding or should i keep it 0. have them take more money? we make fairly the same amount, not sure if our income will impact anything. should only one of us put 1 for allowance.

 

Everyones tax situation is different. You may have deductions or credits that come into play. You would have to speak to a CPA about your specific situation but a general rule is to enter the correct number of allowances/withholdings that is suggested (like adding for spouse or dependents) so that at tax time you are most likely going to end up with enough taxes withheld to cause a refund or at the very least no tax due. Its much harder for folks when they have too little taken out and are hit with a bill then it is for it to end up being an overpayment or breaking even situation. Then after the first year (or multiple years you get refunds) and you feel confident your tax situation is consistent you can then change the allowances so you get more each week and no refund. Some people though do look forward to getting a refund so they leave it as it is or even raise allowances higher so they do get a refund. Does that make sense?  

[Lebanese23 303]

On 11/8/2019 at 4:16 PM, Villanelle said:

Everyones tax situation is different. You may have deductions or credits that come into play. You would have to speak to a CPA about your specific situation but a general rule is to enter the correct number of allowances/withholdings that is suggested (like adding for spouse or dependents) so that at tax time you are most likely going to end up with enough taxes withheld to cause a refund or at the very least no tax due. Its much harder for folks when they have too little taken out and are hit with a bill then it is for it to end up being an overpayment or breaking even situation. Then after the first year (or multiple years you get refunds) and you feel confident your tax situation is consistent you can then change the allowances so you get more each week and no refund. Some people though do look forward to getting a refund so they leave it as it is or even raise allowances higher so they do get a refund. Does that make sense?  

i was going to email my accountant to ask him, but i thought i'd ask here first to see what is everyone's experience with this, is it better for one of us to add allowance or both of us. like if there is a trick around this. i hate taxes and everything about it cuz i just can't seem to comprehend it. especially when im dealing with federal and Illinois withholding, like do they need to match, as in adding allowance to both.

Edited November 11, 2019 by Lebanese23