Gas taxes are on the rise
However, Illinois is one of the states that increased dramatically. The motor fuel tax (such as gasoline, gasohol, and compressed natural gas) doubled from 19 cents per gallon to a whopping 38 cents per gallon.
The diesel fuel tax (such as diesel fuel, liquefied natural gas, and liquefied petroleum gas) increased by 5 cents now making it 45.5 cents.
What’s the reason for the tax hike?
Continue reading “Illinois’ Gas Tax Doubles & What That Means For You”
Filling out a W-4 is less mind-boggling than you think.
One of the first things you have to do when you get a new job is filling out a Form W-4 [Employee’s Withholding Allowance Certificate]. It is essential to complete a W-4 correctly because it determines how much tax will be withheld from your pay and how large your tax refund will be.
The first half of the form is pretty easy. You just have to fill in your name, address, and marital status.
Then you have to figure out how many allowances to claim. This number will determine the amount of your withholding.
Number of allowances to claim
Generally, the number of allowances you should claim will correspond to the number of personal and dependency exemptions you can claim on your tax return, but this is not always the case. Claiming zero allowances will result in the maximum amount of tax withheld. Every additional allowance you claim on top of that means that a little less tax is withheld. Continue reading “How to Fill Out a W-4 Correctly”
Tread carefully before claiming exempt on your W-4 form.
Your W-4 is filed with your employer. Based on a number of allowances and exemptions you claim, your employer will withhold a certain amount of your income from each paycheck to cover taxes owed to the IRS. If you claim EXEMPT on your W-4, it means that no taxes will be taken out of your paycheck throughout the year to cover what you may owe to the IRS. Claiming exempt does not apply to everyone. Let’s find out why.
Am I eligible to claim exempt on my W-4?
If you want to claim exempt on your W-4, both of the following need to be true:
- For the prior year, you had a right to a refund of all federal income tax withheld because you had no tax liability.
- For the current year, you expect a refund of all federal income tax withheld because you expect to have no tax liability.
If one or both of these are false, then you will not be eligible to claim exempt on your W-4.
Are there any exceptions?
In some cases, claiming exempt is just not an option. Below are some reasons why it may not be for you:
- If your income is $950 or more and at least $300 of that is from un-work-related income (ie: interest or dividend income), then you cannot claim exempt from taxes.
- If you plan to claim dependents on your tax return, then you cannot claim exempt from taxes.
- If you will be itemizing your deductions on your tax return for the year, then you cannot claim exempt from taxes.
- If you are Age 65+ or blind, you must use IRS Worksheet 1-3 or 1-4 to determine if you can claim exempt.
I’m EXEMPT for tax purposes. How do I report that?
After doing some research and realizing that you are, in fact, eligible to claim EXEMPT on your W-4, you’ll need to report that. On your W-4, leave box 5 blank. If you have an amount in Box 5, that takes precedence over Box 7. Continue reading “When Can I Claim Exempt on My W-4?”