I am a 16+ year Command Financial Specialist and Volunteer Income Tax Assistant. I do my best to help those who can use it in many areas of finance from taxes to investing etc. I focus a lot on taxes due to the fact that many dont understand it at a level that can help them in their everyday life. For example as an active duty E9 with 25 years in I pay only 118 dollars a month in federal taxes, I claim Married with 14 exemptions and DO NOT OWE at tax time. I pay only what is due, nothing more. Many folks have not looked at a W-4 (available online at irs.gov and accessible for change on MyPay). Back in the late 80's or early 90's the child tax credit changed many rules with regards to tax with holding. A child counts as 3 exemptions if your taxable income is less than 90,000 combined. I have 3 kids and a non working spouse so I am entitled to Married and 12. Mypay will only allow married and 10 so a printed and signed W-4 submitted to PSD is required for more that 10. I also own a rental property so I add 2 more to make 14 for me but only because I know EXACTLY how my tax liability in advance. I do my taxes a year in advance to get a close number to the actual. I have changed my work place taxes to a total of over 25,000 per month back in my co workers taxes and they all enjoy their money now to pay off debt NOW and save interest. If they have no debt they invest the difference. If you are only going to waste the money then letting Uncle Sam be your savings account may be best for you so change nothing. If you have questions on this let me know, I will do my best to help you out. I can send you the W-4 if you like and explain as necessary.

The quick numbers for exemptions with kids and non working spouse are as follows.
1 child Married and 6.
2 Children Married and 9.
3 Children Married and 12.

If this scares you from paying too little do the math on the W-4 and subtract one or two from it. That can be your buffer. usually one exemption averages to 30-50 dollars in pay.

Single folks, you can claim Single and zero, one or two, up to you but it wont be the big change like for married with kids, sorry.

Added W-4 instead of emailing to folks, give it a read, do the math and see what you have now. You can always change your W-4 at Mypay anytime you want.

Planning, Planning, Planning....

You can go no where in life without a plan.

I was also a command financial specialist when I was active duty. Great job for helping inform the sailors and family members about financial awareness.

But how is it that you don't end up paying during the tax season??? And how can one figure out what your round about annual tax liability is? And then how can you figure out how to translate that into the number of exemptions that you should claim? Please provide me with some more insight! I am always looking for a better way to do my taxes:-)

Thanks!

Glad you asked! First figure your TAX liability for the year. That is all TAXABLE pay you receive for most that is the BASE PAY and SEAPAY for a year, One months Taxable pay x 12. Add interest and such you got last year for an estimate. Then deduct your tax form numbers as follows. Married standard deduction for 2009 is 11,400 and personal exemptions are 3650 each. Take a family of 4, that is 11,400 + 14,600=26,000 of income to be deducted from your taxable yearly pay. Lets say you make 50,000 of taxable pay so then the number would be 24000 but wait there is more. You get two 1,000 dollar tax credits in child tax credit too. A 1000 dollar tax credit is equal to removing 10000 in income. You get that from looking in the tax table, it is actually 1003 dollars for 10000 in income so I am rounding off. With two kids that is 2,000 in credit or 20,000 in income not taxed. Now subtract the 20000 from your remainder of your TAXABLE pay and that is 4000 for this example. Wow you make 50000 in income but only 4000 is taxed! The tax on 4,000 dollars income is 403 dollars! Divide that by 12, it equals 33.50 a month. That is to break even, no refund and not owe. Shoot me some numbers on your taxable pay and child situation and I will figure your amount in 5 minutes just like I illustrated here. If is confusing let me know, you can send me a private message with your email address in it and I will respond that way to keep particulars off line. Let me know and I am glad to work specifics for you, it is no trouble, I love putting more money in peoples pockets.

For me, E9 over 24, I am taxed on just under 20,000 dollars with the example applied to me above, I have 3 kids. I would owe 2169 taxes for the year or 180.00 a month, I pay less than that because I also own a rental house and get to deduct all the mortgage interest and rental commissions on top of the standard deduction and repairs so I write off another 15,000 so I pay taxes only on 5000 dollars....I pay 118 a month but that is because I leave some room for error in case my home does not rent out and such...I could pay LESS if I wanted too.

Hope this isint to old of a post. FCCM, I have a question. I have 2 kids and Im waiting for their SSN numbers so i can claim them on my taxes. I have kinda slept on this for a few years. I hear i can claim up to 3 years back even if iv already done my taxers. Is that correct? Also I am tax exempt is that going to just be money in my pocket? so basiclly what im asking is will i get an automatic 6k back if i claimed them for the last 3 years?

I await your reply

Thank you

You can go back and file corrections to your taxes, 1040 X. You MUST HAVE the old tax forms to do this. Socials take about 2-3 weeks to get, I had a child here in Japan and got my SS in less than a month. 1000 a kid for each year should be the 6000 you mention, as long as you did not owe. So you are foreign earned income? I have not had an example exactly like yours but if you filed no taxable income for the last 3 years you can still get a rerund do to the child tax credit being a refundable credit. See the folks at the VITA office for refiling, did you even place your kids on the taxes at all? Without socials? There are several questions you need to meet for this that I cant go over right now but basically it could work out for you as you have heard if all the tests are met to do so.

Thank you very much I will go to the Tax office. Im not sure if i have my old tax forms but I did it through H&R block so they probibly have them in the system. Thanks for the Information.

P.S. Iv been fileing as single up until now. Didint know i could put them on my form without SSNs.