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Show JOSEPH H. CUBLER JAMES M. WILSON I f-j (jUBLER & certfiedpublicaccountnts BOX 11N 380 WEST 200 NORTH A CC")"! A "TCC CEDABCITV,UTHM7?0 WITH HOLDING ALLOWANCES (Don't Overdo It) Every employee is required to complete a "Form W-4" W-4" telling his employer the number of withholding allowances to which he is entitled. This Form W-4 remains in effect until the employee changes it. However, those employees who filed "Exempt from withholding" on their W-4s for 1981 must complete a new W-4 by February 15, 1982. If you will lose an exemption in 1982 (for example, a child marries and moves away from home), you must file a new Form W-4 with your employer within ten days from the date of the change. In general, you are entitled to one allowance for yourself, one for your spouse unless your spouse also works and claims an allowance on his-her W-4, one allowance if you are 65 or older, one allowance if you are blind and one allowance for each dependent. The worksheet on Form W-4 will assist you in calculating other allowances to which you are entitled (for example, estimated itemized deductions, alimony payments, estimated tax credits and the "new" two-earner two-earner married couple deduction). Taxpayers who did not owe any federal income tax in 1981 and will have all withholding refunded to them are allowed "Exempt" on their W-4s if they do not expect to owe any federal income tax for 1982. This provision usually applies to students who will not earn enough to owe income taxes. Some taxpayers have been given the impression that filing "Exempt" status on W-4s somehow prevents them from paying income tax. Under the new tax act, the penalty for claiming withholding allowances to which you are not entitled or filing an "Exempt" W-4 when you do not qualify subjects you to a possible $500 civil and $1,000 criminal penalty. Employers are required to send to the IRS any W-4s claiming more than fourteen allowances or claiming "Exempt" status if wages are more than $200 a week. |