Hey guys, I've got a bit of a niche question for ya. Do a lot of college students claim 1 exemption when they fill out their W-4 forms, or is there a different common practice? I'm just curious as to what other people do and what might be best for me.
In terms of completing a W-4 form as a college student, it really depends on your individual financial situation.
Many college students, if they're not dependents of their parents, tend to claim 1 because they're essentially only providing for themselves. However, if you're a dependent, it's standard to claim 0.
It's important to note that claiming 0 will result in more tax being taken from your paychecks during the year, but it could mean a bigger refund when you file your taxes. If you claim 1, less tax will be taken out of your paychecks, but your tax refund might be smaller or you may even have to pay in when you do your tax return.
Do note that the optimal strategy might depend on your income level and how much you anticipate you'll owe in taxes at the end of the year. If you're unsure, it might be a good idea to consult with a financial advisor or a tax professional to determine what would be best in your particular situation.
In addition, you can use the IRS Tax Withholding Estimator to give you a fairly good idea of what you should claim on your W-4 so as to ensure you are not under-withheld or over-withheld.
In any case, remember: one size does not fit all. It's all about your individual economic situation and comfort with having more in your pockets now or getting a larger refund later.
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