Tax Planning/W-4 Withholdings


Hello Owen, I am head of household filing joint with my wife and 2 children under 10. The youngest being 3, for the past three years we have gotten a pretty hefty return. Last year for example we got back $5k because of all the credits but I paid in $1,600 in taxes. Could I have not paid any taxes and got back $3,400? Is the math that simple or would my credits have been less because I didnt pay taxes throughout the year even though that was all coming back to me anyways? I'm thinking of adjusting my withholdings to pay no taxes throughout the year and get less of a refund going foward. This is in Tennessee and there is no state tax. Only federal. Thanks in advance for any advice.

Chris - Assuming that everything this year is the same as last year in terms of income and deductions, then the net effect would be the same.  If you have $-0- withheld, your refund would have been the difference.  It is that simple, however,wWithout seeing your return, I cannot say definitively, but it appears from what you have described that is the outcome you could expect.

I hope this helps.

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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