Fed/State allowances...how many should I claim?

[savemachine]

Hi again all,

I have a tax question this time.
I am a 28 years old single...person, and currently claiming 2 for Fed and 1 for State (California), but I have just added my name to the title of an investment home my mom had bought in Las Vegas, so it showed me as a second owner. My mom had just retired and she told me to add my name in, so that I can claim the taxes, bless her heart.

Essentiall, I pay about 1800 dollars every month, I put away 10% of my salary every month towards 401K which is about 850 dollars. This will be my third year contributing to ROTH IRA, and my taxable interests from investment is going to be less than 300 dollars.

Anyway, I followed the step of some financial calculator to figure out how many allowances I should withhold, and it gave me 6 for Federal. I don't know what the withholding should be yet for State (and I have no idea where to find the calculator), but does this number seem right to you? I spoke to my friend, and he said to go ahead and change the withholdings since I don't want to be loaning the government my money for a whole year. His logic seems to make sense to me, but there has to be something else to it that I am overlooking.

Also, if anyone would be so kind as to direct me to the calculator to figure out the State withholding too, I would greatly appreciate it.

Regards,

[tripods68]

Employment Development Department

[savemachine]

Thanks for the link tripod. I have a follow up question however.

At first I was under the impression that I can claim the house since my name is now in the title, but my tax person said otherwise. She mentioned that my name has to be on the loan also for me to be able to claim the mortgage payment? Is that true? I do pay for it every month, and I have proof that the payments are made from my bank account.

Any help is appreciated.

[noppenbd]

I'm not a tax pro but I'm going to guess that paying someone else's loan is going to be considered a gift to the actual borrower (your mom). In that case you could actually end up owing money due to gift tax. You can give up to $11000 yearly without paying gift tax. Definitely check with your accountant on that.

[tripods68]

Savemachine,

Yes. You're name has to be on the loan for you to receive 1098 from the lender. Without you name being added, I don't think you can claim deduction on interest you paid.

[savemachine]

tripod: You're absolutely correct. I had to search around and even called an IRS for that answer. I even called Countrywide (my lender) and ask if my name can be put on the loan as an assumption, but the only way they told me that my name could be on the loan is to refinance.

noppenbd: That's something I haven't thought about. I should look further into that. I seriously don't want to owe anymore money that I already have.