W-4

I started a new job recently and when I filled out the w-4 i followed the directions. It said 1 if no one can claim you and the next line had add 1 if you are single and have one job.

So i had a total of 2 allowances. In the past I only recall ever having 1, and I've always gotten money back.

Someone told me I should just leave it at 1 or they won't take enough out and I'll end up owing money. I say I'd rather owe some than have them owe me money (this way i'm making gains on my money). Their response was that if you owe money you're more likely to be audited and what not.

Is there any truth to this? Should I even care about it? General thoughts?

Filing taxes has always been really simple for me, the most complex thing I've had is education credits so I really don't know much about this stuff.

[Edited on February 16, 2008 at 1:17 PM. Reason : w-4]

2/16/2008 1:16:50 PM

i doubt owing money makes an audit more likely. however if you owe too much you will end up paying penalties. honestly just follow the damn instructions on the W-4 and you'll be straight. its not worth stressing about

2/16/2008 1:36:11 PM

No you wont be more likely to be audited. Whoever told you that was an idiot.

2/16/2008 4:12:46 PM

2006 i had federal at 1 and got back like $800 (this was on like $55k taxable). 2007 i kept it at 1 for half the year then moved to 2 (effectively a 1.5) and ended up owing $100 (on like $63k taxable). if i wasn't getting married this year, i'd probably move back to 1.

2/16/2008 4:42:23 PM

No you wont be more likely to be audited. Whoever told you that was an idiot.

2/16/2008 5:16:42 PM