Am I eligible for W4 Tax Withholding Exemption?Need Help from Semanticists!

[historicallinguist]

Hi. So, I am starting my new TA job in the new linguistics department. This is my first salary-based (i.e. not hourly wage-based) job. I am now required by the Human Resource of my school to file federal W4 form so that the HR can figure out whether they should withhold federal income tax from my salary, and, if they should, how much tax should be withheld. Here is the dilemma. I did not have a job last year, and I was basically living on federal student loan last year. So, I was not required to file tax for 2015, because I do not meet the filing threshold of the IRS. On the W4 form, it says, in order to be exempted from tax withholding by the federal government, I will have to meet the following requirement: "Last year I had a right to a refund of all federal income tax withheld because I had no tax liability". Surely, I did not have any tax liability last year. But for the first part of the clause, I am not sure quite sure about the meaning of the quantifier "all". Could it include an interpretation of 0? For example, if 0 federal income tax was withhold and 0 withheld tax can be refunded, is it true to say that I did have the right to a refund of all federal income tax withheld? Any semanticist around could solve this problem?

[fuzzylogician]

You don't need a semanticist, you need a tax expert. Or, you need to contact HR and ask for their advice. It's probably worth noting that even if your school does not withhold any money, the IRS may still determine that you owe them money at the end of the year (check with the withholding calculator: https://www.irs.gov/individuals/irs-withholding-calculator). As I understand it, the W4 is just about how much money gets taken out of your monthly paycheck, but when you do your taxes at the end of the year it may turn out that you paid more or less than you owe, and accordingly you may get a refund or owe the government money. If nothing is withheld from your paycheck, it'd be almost certain that you'd owe something. Whether that is better than overpaying and getting a refund.. well. I don't know. Disclaimer: I may be an expert in semantics, but I am most definitely not an expert in taxes. 

[historicallinguist]

19 minutes ago, fuzzylogician said:

You don't need a semanticist, you need a tax expert. Or, you need to contact HR and ask for their advice. It's probably worth noting that even if your school does not withhold any money, the IRS may still determine that you owe them money at the end of the year (check with the withholding calculator: https://www.irs.gov/individuals/irs-withholding-calculator). As I understand it, the W4 is just about how much money gets taken out of your monthly paycheck, but when you do your taxes at the end of the year it may turn out that you paid more or less than you owe, and accordingly you may get a refund or owe the government money. If nothing is withheld from your paycheck, it'd be almost certain that you'd owe something. Whether that is better than overpaying and getting a refund.. well. I don't know. Disclaimer: I may be an expert in semantics, but I am most definitely not an expert in taxes. 

Thank you for your advices, Fuzzy. I checked out the withholding calculator. The calculation turns out to yield a result of 0 expected tax liability for 2016, and yield two different recommendations: 1. put 4 allowances and not claiming exemption from withholding (thus they expect to withhold less than 25 dollar for 2016, according to the result page) 2. claim exemption that I may be eligible, according the result page. I guess I should print this result page out and bring to the HR tomorrow, and ask which one I should pick......

[historicallinguist]

37 minutes ago, fuzzylogician said:

As I understand it, the W4 is just about how much money gets taken out of your monthly paycheck, but when you do your taxes at the end of the year it may turn out that you paid more or less than you owe, and accordingly you may get a refund or owe the government money

I want to do the exemption thing primarily because I do not think my income for 2016 will reach the filing threshold. If some portion of the salary is withheld, then even if I am NOT required to file tax for 2016, I will still need to file in order to get the withheld money back. Therefore, getting an exemption from withholding would save me a lot of work (because I have never reached the filing threshold, and therefore was never required to file, and thus never filed. If I file for 2016 in order to get the money back even if I am not required, I will have to spend tons of time to figure out how to file tax. That is really a lot of work.)

Edited August 19, 2016 by historicallinguist

[avflinsch]

6 hours ago, historicallinguist said:

I will have to spend tons of time to figure out how to file tax. That is really a lot of work.

You would most likely be filling out form 1040EZ - it takes about 10 minutes if you are really slow.

 

[fuzzylogician]

 

7 hours ago, historicallinguist said:

I want to do the exemption thing primarily because I do not think my income for 2016 will reach the filing threshold. If some portion of the salary is withheld, then even if I am NOT required to file tax for 2016, I will still need to file in order to get the withheld money back. Therefore, getting an exemption from withholding would save me a lot of work (because I have never reached the filing threshold, and therefore was never required to file, and thus never filed. If I file for 2016 in order to get the money back even if I am not required, I will have to spend tons of time to figure out how to file tax. That is really a lot of work.)

Well even if you don't file this year you will next. Or at least I really hope so, because if not then your program is underpaying you. So I would get out of the "it's really hard" mindset (it's really not). But yes, ask HR because it still is easier not to have to deal with it. 

[TakeruK]

I would recommend filing your taxes every year because it's not as hard as it sounds and it will eventually make your life a lot easier when you do need to file them! 

It's not necessary but it's a lot easier if you just pay for tax software. All you have to do is answer questions and fill in forms on the computer exactly from the tax forms that you get from your employer(s). They usually cost about $30-$50, depending if you are filing federal tax only or federal + state tax. You probably don't need the fancy tax software that you have to install on your computer, you can just do it online and pay the fee. The software will remember your basic information so you don't have to re-enter it every year. And, software also helps you find additional tax deductions. e.g. You can even claim the money used to pay for tax software as a deduction on the following year's tax return.

[historicallinguist]

@fuzzylogician@TakeruK @avflinsch  Thank you for all of your advices, and I contacted the HR today, and the problem has now been solved!