Exemptions withheld

**kork13** · 02-26-2013, 12:38 PM

It's not perfect, and you kind of have to follow the "guess & check" methodology, but I've found Paycheck City's salary calculator to be quite accurate (within 25-50 cents of actual paycheck withholdings).

**wjcalderon** · 02-27-2013, 02:52 AM

I agree - Paycheck City is the best online payroll calculator.

But the number of exemptions that you claim would probably not have had any effect on your bonus check. Bonuses are typically taxed at 25% Federal W/H, regardless of your marital status or number of exemptions.

**Beaver24** · 02-27-2013, 04:21 AM

thanks for the responses. I also received another HUGE shock last night with taxes. My wife and I are married filing separate because she has school loans that are on income based repayment plan. If we filed married/jointly, we would not qualify for that program and our school loan payment would be through the roof.

I found out that if you're married filing separately, that you can't deduct student loan interest from your taxes? My wife and I pay $5,000/yr in interest for school loans, and this country is taking our hard earned money and payments and not allowing us to receive our interest refund.

What gives, and is there a way around this, because I find this to be VERY frustrating.

Thanks,

**riverwed070707** · 02-27-2013, 04:43 AM

Originally posted by Beaver24 View Post

thanks for the responses. I also received another HUGE shock last night with taxes. My wife and I are married filing separate because she has school loans that are on income based repayment plan. If we filed married/jointly, we would not qualify for that program and our school loan payment would be through the roof.

I found out that if you're married filing separately, that you can't deduct student loan interest from your taxes? My wife and I pay $5,000/yr in interest for school loans, and this country is taking our hard earned money and payments and not allowing us to receive our interest refund.

What gives, and is there a way around this, because I find this to be VERY frustrating.

Thanks,

Well to be clear, the country isn't taking your hard earned payments, the institution you borrowed the money from is. And while an interest deduction is nice, you spent that money and its your responsibilty to pay it back whether you're getting any sort of tax relief for doing so. There are rules like this to avoid loop holes, including those who file separately in order to keep a lower loan payment from double dipping the system. You're already getting a financial break in the form of a student loan repayment that is based on your income. Don't mean to snark on you but this is just one example of give and take in the tax system. There are a lot of times when you will qualify for more than one thing but only be able to take the deduction or credit for one or when your filing status will affect eligibility.

**Beaver24** · 02-27-2013, 05:43 AM

Riverwed,

Thanks for the response, and I completely get what you're saying, and understand the reasoning. However, Our payments are $6,000/yr difference between Married Filing Jointly, compared to Married Filing Separate.

These income based repayment plans are I/O repayments,and mine are getting to the point where I'm paying nearly all principal, so my interest deductions are below $1,000, while hers was $3,700 last year. So, while I see the benefit here, which is why we're going with the MFS, I still feel like I'm not getting my "piece" of the pie in regards to student loan interest.

Does this make sense, or am I completely off base? Thanks again for the input.

**riverwed070707** · 02-27-2013, 05:59 AM

Originally posted by Beaver24 View Post

Riverwed,

Thanks for the response, and I completely get what you're saying, and understand the reasoning. However, Our payments are $6,000/yr difference between Married Filing Jointly, compared to Married Filing Separate.

These income based repayment plans are I/O repayments,and mine are getting to the point where I'm paying nearly all principal, so my interest deductions are below $1,000, while hers was $3,700 last year. So, while I see the benefit here, which is why we're going with the MFS, I still feel like I'm not getting my "piece" of the pie in regards to student loan interest.

Does this make sense, or am I completely off base? Thanks again for the input.

Off base IMO. I'm not saying you aren't paying the interest, just saying you're filing separately in order to show you make less than you actually do -- legally of course, but still less than your household is bringing in to give you a payment break. If you choose to do that, you choose to forefiet your ability to claim interest. If the interest deduction is that big of a break for you, consider switching to a regular repayment plan. You'll save interest that way too since you won't be dragging out the repayment period so long.

**ccole** · 02-27-2013, 02:13 PM

Originally posted by Beaver24 View Post

Good Afternoon,

I recently rec'd my bonus check for 2012, and was very surprised that 48% of it went to taxes (bonus check was included in with my 2-week pay as well).

Simple question, does anyone have a formula (besides the IRS calculator), where I can determine the amount of exemptions going forward I can claim, without having to pay in at the end of 2013.

Thank you,

Beaver24

can you try this http://www.wsu.edu/payroll/cgi-bin/taxcalc2012.htm

Exemptions withheld