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Some tax / w4 questions

Some tax / w4 questions

Old Oct 22nd 2013, 10:50 pm
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Default Some tax / w4 questions

So, I just moved to Los Angeles last month, and have been working since Sep 3. I'm a resident alien who is married, arrived on a CR1.

I would really appreciate help regarding some tax questions I have... (boring I know)

1) I earned about GBP 2K a month after tax from January thru August, was taxed thru PAYE. My wife earned roughly the same (also in the UK), also taxed thru PAYE. Because of double taxation treaties, we won't have to pay extra tax, right? Will I still have to declare this income on the 1040?

2) I initially claimed 3 allowances on the W4 form- 1 for myself, 1 for my wife, and 1 because my wife wasn't earning at the time I started my job. (Questions, A, C and B respectively)
However, she just got a job as an independent consultant (technically self-employed).
Do I need to resubmit my W4, as one of those allowances no longer applies?

3) I noticed I am being deducted only 500 usd from my 2500 USD biweekly paycheck... that's only 20%.... sounds like I am being under taxed?

Basically, I wanted to avoid a huge tax bill from IRS come tax return time so was needing some advice. Should I fill in my W4 any differently to avoid this?

Thanks all.
monfed
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Old Oct 22nd 2013, 11:02 pm
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Default Re: Some tax / w4 questions

Originally Posted by monfed View Post
So1) I earned about GBP 2K a month after tax from January thru August, was taxed thru PAYE. My wife earned roughly the same (also in the UK), also taxed thru PAYE. Because of double taxation treaties, we won't have to pay extra tax, right?
Right.

Will I still have to declare this income on the 1040?
YOU don't, but your wife has to claim hers. All USC's are required to report all worldwide income each year on a US tax return.

2) I initially claimed 3 allowances on the W4 form- 1 for myself, 1 for my wife, and 1 because my wife wasn't earning at the time I started my job. (Questions, A, C and B respectively)
However, she just got a job as an independent consultant (technically self-employed).
Do I need to resubmit my W4, as one of those allowances no longer applies?
No, not necessarily. Only if you want more tax withheld.

3) I noticed I am being deducted only 500 usd from my 2500 USD biweekly paycheck... that's only 20%.... sounds like I am being under taxed?
20% sounds about right to me, but if you think it's under taxed, you can always change your W4 to claim fewer dependents, so they will withhold more tax.

Basically, I wanted to avoid a huge tax bill from IRS come tax return time so was needing some advice. Should I fill in my W4 any differently to avoid this?
You almost always have to let one year go by and see how it goes at the end of the year, then make adjustments the following year if you were too far off the "break-even" mark.

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Old Oct 23rd 2013, 5:30 pm
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Default Re: Some tax / w4 questions

I'd be a little careful with claiming too many exceptions and then find yourself with an 'unexpected' tax bill to pay in April. Personal choice, but I'd do only 1 exception ( Married) and then almost certainly get 'something' back.
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