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From: spock@iham1.UUCP (Ed Weiss)
Newsgroups: net.taxes
Subject: Re: Increasing deductions because of a mortgage
Message-ID: <521@iham1.UUCP>
Date: Thu, 27-Feb-86 13:52:54 EST
Article-I.D.: iham1.521
Posted: Thu Feb 27 13:52:54 1986
Date-Received: Fri, 28-Feb-86 22:35:25 EST
References: <104@spp5.UUCP>
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Organization: AT&T Bell Labs, Naperville, IL
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In article <104@spp5.UUCP>, brahms@spp5.UUCP (Bradley S. Brahms) writes:
> [}{]
> At the beginning of this year, my wife and I moved into a new house.  Of
> course, the intestest part of the paryments are tax deductible.  Is it
> legal to increase the number of deductions on a W-4 so that we won't have
> to have a huge tax refund at the end of the year?  I hate given interest
> free loans!  If so, how do I go about figuring how many deductions to
> take?  Ask our local company employee office?  Thanx.
> 
> 			-- Brad Brahms
> 			   usenet: {decvax,ucbvax,ihnp4}!trwrb!trwspp!brahms
> 			   arpa:   Brahms@usc-eclc

I believe you easily take up to 15 deductions.  If you want to take
more than that it gets complicated.  (They want PROOF.)

This is what I did:  I managed to acquire a copy of the tables employers
use to compute how much tax is to be withheld.  You should be able to
get a copy of these tables or the formula from your payroll department.
I then figured out how much my taxes would be the next year (given
my approximate salary for the coming year, the amount of interest I
would pay, and assuming the tax rates would be the same).
Then I used the tables to see how many deductions I could take and
still have the correct amount of tax withheld.  I then subtracted 1
from that number of deductions to be safe.

The above worked for me.  You can adjust your deductions during the
year if your calculations are not working out (or one of the variables
changes).  I suggest that you make sure Uncle Sam OWES you some money
at the end of the year.  I believe you are more likely to be audited
if you owe money.

Good luck.
-- 

					Ed Weiss
					ihnp4!iham1!spock

					--> Live Long and Prosper <--