Publication 505 - Tax Withholding And Estimated Tax (Page 6 of 49) in pdf

between the Forms W – 4 for each job. You can-

Self. You can claim an allowance for your

Head of household (worksheet line E). You

not claim the same allowances with more than

can file as head of household if you are unmar-

exemption on line A unless another person can

one employer at the same time. You can claim

ried and pay more than half the cost of keeping

claim an exemption for you on his or her tax

all your allowances with one employer and none

up a home for yourself and your dependent or

return. If another person is entitled to claim an

with the other, or divide them any other way.

other qualifying individual. For more information,

exemption for you, you cannot claim an allow-

see Head of Household under Filing Status in

ance for your exemption even if the other person

Married individuals. If both you and your

Publication 501.

will not claim your exemption or the exemption

spouse are employed and expect to file a joint

will be reduced or eliminated under the

If you expect to file as head of household on

return, figure your withholding allowances using

phaseout rule.

your 2002 tax return, enter “1” on line E of the

your combined income, adjustments, deduc-

worksheet.

tions, exemptions, and credits. Use only one set

Spouse. You can claim an allowance for

of worksheets. You can divide your total al-

your spouse’s exemption on line C unless your

Child and dependent care credit (worksheet

lowances any way, but you cannot claim an

spouse is claiming his or her own exemption or

line F). Enter “1” on line F if you expect to

allowance that your spouse also claims.

another person can claim an exemption for your

claim a credit for at least $1,500 of qualifying

If you and your spouse expect to file sepa-

spouse. Do not claim this allowance if you and

child or dependent care expenses on your 2002

rate returns, figure your allowances separately

your spouse expect to file separate returns.

return. Generally, qualifying expenses are those

based on your own individual income, adjust-

you pay for the care of your dependent who is

Dependents. You can claim one allowance

ments, deductions, exemptions, and credits.

under age 13 or for your spouse or dependent

on line D for each exemption you will claim for a

Alternative method of figuring withholding

who is not able to care for himself or herself so

dependent on your tax return.

allowances. You can take into account most

that you can work or look for work. For more

Phaseout. For 2002, your deduction for

items of income, adjustments to income, deduc-

information, get Publication 503, Child and De-

personal exemptions is phased out if your ad-

tions, and tax credits in figuring the number of

pendent Care Expenses.

justed gross income (AGI) falls within the follow-

your withholding allowances. Because the Form

Instead of using line F, you can choose to

ing brackets.

W – 4 worksheets use a simplified method to

take the credit into account on line 5 of the

take these items into account, they do not al-

Deductions and Adjustments Worksheet, as ex-

Table 1.1

ways result in withholding that is exactly equal to

plained later under Tax credits.

the tax you will owe. You do not have to use the

Single . . . . . . . . . . . . . . . . . $137,300 – $259,800

Married filing jointly or qualifying

worksheets if you use a more accurate method

Child tax credit (worksheet line G). If your

widow(er) . . . . . . . . . . . . . $206,000 – $328,500

of figuring the number of withholding al-

total income will be between $15,000 and

Married filing separately . . . . . $103,000 – $164,250

lowances.

$42,000 ($20,000 and $65,000 if married), enter

Head of household . . . . . . . . . $171,650 – $294,150

The method you use must be based on with-

“1” on line G for each eligible child. Enter 1

holding schedules, the tax rate schedules, and

additional if you have three to five eligible chil-

If you expect your AGI to be more than

the 2002 Estimated Tax Worksheet in chapter 2.

dren or 2 additional if you have six or more

the highest amount in the above

It must take into account only the items of in-

eligible children. If your total income will be be-

bracket for your filing status, enter “0”

come, adjustments to income, deductions, and

tween $42,000 and $80,000 ($65,000 and

on lines A, C, and D. If your AGI will fall within

tax credits that are taken into account on Form

$115,000 if married), enter “1” on line G if you

the bracket, use the following worksheet to fig-

W – 4.

have one or two eligible children, enter “2” if you

ure the total allowances for those lines.

You can use the number of withholding al-

have three eligible children, enter “3” if you have

lowances determined under this alternative

four eligible children, or enter “4” if you have five

Worksheet 1.1

method rather than the number determined us-

or more eligible children.

1. Enter your expected AGI . . . . . . . . . .

ing the Form W – 4 worksheets. You must still

An eligible child is any child:

2. Enter:

give your employer a Form W – 4 claiming your

•

$137,300 if single

For whom you claim an exemption,

withholding allowances.

$206,000 if married filing jointly

•

or qualifying widow(er)

Who will be under age 17 at the end of

Employees who are not citizens or residents.

$103,000 if married filing separately

2002,

If you are neither a citizen nor a resident of the

$171,650 if head of household . . . . .

•

United States, you usually can claim only one

3. Subtract line 2 from line 1 . . . . . . . . .

Who is your son, daughter, stepchild,

withholding allowance. This rule does not apply

4. Divide the amount on line 3 by $125,000

grandchild, adopted child, or foster child,

if you are a resident of Canada or Mexico, or if

($62,500 if married filing separately).

and

Enter the result as a

you are a U.S. national. It also does not apply if

•

decimal . . . . . . . . . . . . . . . . . . . .

Who is a U.S. citizen or resident alien.

your spouse is a U.S. citizen or resident and you

5. Enter the number of allowances on lines

have chosen to be treated as a resident of the

A, C, and D of the Personal Allowances

For more information about the child tax

United States. Special rules apply to residents of

Worksheet without regard

credit, see the instructions in your Form 1040 or

Korea, Japan, and India. For more information,

to the phaseout rule . . . . . . . . . . . . .

Form 1040A tax package.

6. Multiply line 4 by line 5. If the result is

see Withholding From Compensation in chapter

not a whole number, increase it to the

Instead of using line G, you can choose to

8 of Publication 519.

next higher whole number . . . . . . . . .

take the credit into account on line 5 of the

7. Subtract line 6 from line 5. This is the

Deductions and Adjustments Worksheet, as ex-

maximum number you should enter on

Personal Allowances Worksheet

plained later under Tax credits.

lines A, C, and D of the Personal

Allowances Worksheet . . . . . . . . . . .

Use the Personal Allowances Worksheet on

Total personal allowances (worksheet line

page 1 of Form W – 4 to figure your withholding

H). Add lines A through G and enter the total

Only one job (worksheet line B). You can

allowances for all of the following that apply.

on line H. If you do not use either of the work-

claim an additional withholding allowance if any

•

sheets on the back of Form W – 4, enter the

Exemptions.

of the following apply.

number from line H on line 5 of Form W – 4.

•

Only one job.

You are single, and you have only one job

•

at a time.

Head of household status.

Deductions and

•

You are married, you have only one job at

Child and dependent care credit.

Adjustments Worksheet

a time, and your spouse does not work.

•

Child tax credit.

Fill out this worksheet to adjust the number of

•

Your wages from a second job or your

your withholding allowances for deductions, ad-

spouse’s wages (or the total of both) are

Exemptions (worksheet lines A, C, and D).

justments to income, and tax credits. Use the

$1,000 or less.

You can claim one withholding allowance for

amount of each item you can reasonably expect

each exemption you expect to claim on your tax

If you qualify for this allowance, enter “1” on line

to show on your return. However, do not use

return.

B of the worksheet.

more than:

Page 6

Chapter 1 Tax Withholding for 2002

Publication 505 - Tax Withholding And Estimated Tax Page 6

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