McZaki

Hello Folks,

I'll soon be working in California (first time working in the states), intra-company transfer on L-1A. Our SF office has sent me gazillions of forms to complete and a good few of those are related to tax e.g. W-9, W-4, DE 4 etc etc etc - the list is ridiculous tbh

I am aware that my wife can work on L-2 permitting an approved EAD (I’ll be on L-1A) but she has no intention to go back to work anytime soon – not at least in 2013/mid 2014. Considering that, should I complete the filling status as "Head of household" or should I be selecting “Married with single income”?

Hope above makes sense, and thanks in advance for your guidance.

ian-mstm

Since both are applicable, I suggest you select the one that gives you the greatest tax advantage.

Ian

Noorah101

If you're doing an actual tax return, you can still file "married filing jointly", even if your spouse isn't working. It gives you a bigger tax break.

Rene

Bob

As this is a company transfer, you really should have gotten them to pay to get your taxes done for the first and last year in the US as part of the relocation package...

If you're doing it yourself though, do as Ian suggests and play around with the numbers to see which gives you the best return, but it is often "married filing jointly", but that really can change depending on personal circumstances.

Giantaxe

As he's yet to live and work in the US, I believe the OP is referring to form W4 to set his tax withholding. Given he's married, "head of household" isn't relevant. The OP also needs to be aware that withholding isn't one's actual tax liability; it's what you choose to have withheld to pay one's taxes. There are penalties if you under withhold in the tax year (with a bunch of safe harbour provisions). Equally, if you over withhold, you will have given the government a tax-free loan until you subsequently file your tax return for the tax year.

Jscl

Ditto to the post above me. You CANNOT file a tax return as Head Of Household while married unless you live apart from your spouse for the last six months of the year and have a qualifying dependent. If you are married and live with your spouse your only filing options are Married Filing Jointly or Married Filing Separately.

For the W4 and DE4, if you are married with a single income and there are no unusual factors I'd just follow the instructions on the form, which would give you one allowance for yourself and one for your wife (and one each for any child).

McZaki

Many thanks all for your advice and feedback.

For the W4 & DE4, 'married filing jointly' is the most appropriate option for me.

jeffreyhy

There is no such category. There is a category 'Married filing separately', but that's something very different.

It won't help answer you question, but to illustrate why one should be careful to correctly call things what they are, I am married and I have an income but my wife does not have an income. We file 'Married filing jointly', because it saves us a bundle of money as compared to me filing 'Married filing separately'. On the other hand, if we both had incomes, there are situations where we would save money if we each filed 'Married filing separately'.

Regards, JEff

EDIT: Ah, you're talking about the W-4 Employee's Withholding Allowance Certificate, not the tax return? But on W-4 the choices are "Single", "Married", or "Married, but withhold at the higher Single rate". New admonishment - if you want to get good information you have to give good information.

Regards, JEff

nun

Yep no taxes to do until 2014, but the W-4 (and DE-4 for CA) needs to be filed so your company has an idea of how much tax to take out of your paycheck. As you are marriedyou cannot file as "Head of Household".

I'll give the usual warning to the OP to make sure he/she understands the US tax implications of any UK investments and penions they own, and that they have taken active steps to organize or sell them prior to moving to the US.

Michael

I disagree. You can fill out the W-4 anyway you want to as long as enough is withheld to cover your taxes by year end. The W-4 doesn't go to the government but only to the employer. He could even fill out the W-4 as single with 5 or more allowances instead of "married" if that will produce better results for withholding.

When I got out of sync with my withholdings due to unearned income, bonuses, or exercised stock options, I just changed my W-4 to have additional money taken out instead of filing a quarterly estimate and then later changed it back.

Giantaxe

If you claim over a certain threshold of allowances then it does go to the IRS. And the IRS can question whether you are justified - you've signed the form under penalty of perjury - the number you are claiming. Happened to me one year including a phone call from the IRS at my workplace.

Yep, I tend to have an additional dollar amount withheld at the end of the year for this purpose. The nice thing is that taxes paid through withholding are deemed to have been spread across the year, so you don't have to worry about having paid enough tax quarterly to avoid penalties.

Michael

I've heard of people having problems by claiming exempt but i have never heard of anyone having problems with too many allowances.


Withholding is based on your base salary only over the full year. Bonuses and exercised stock options are normally taxed at a flat percentage which can be less than the marginal tax bracket where that income should reside. Normally you won't be accessed penalities if you don't file a quarterly estimate even if you are under withheld unless you were under withheld the previous year. So to make sure that I didn't fall into that trap, I always tried to make sure I have enough taxes withheld each year to cover the taxes I owe.