Quote:
Originally Posted by capt_slow
I'm in the process of buying my first home and I'm told it's a common practice for people to claim more allowances on their W-4. The idea sounds simple enough, get a larger paycheck and come tax time the mortgage interest and property tax deductions would even out the tax bill.
Has anyone from CA actually done this? If so, mind if I ask how many allowances you put on your W-4? Short of talking to a CPA, the figure I'm crunching out is a whopping 8 allowances!
For reference, my budget is well below the 750k loan cap for the mortgage interest deduction. The property taxes in the area I'm looking at are also below the $10k cap.
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Yes, do it. I have done so for nearly 30 years. Work with an accountant to calculate the number of allowances you need to break even with the government on April 15 each year. It avoids Uncle Sam holding your money more than he needs to. You want to hold your money.
State of residence does not matter if the question relates to Federal taxes.
I claimed a significantly higher number of deductions than there were humans in my household. Ignore any raised eyebrows from your HR or payroll departments, just tell them to process the paperwork.