Question by Larry: how many exemptions may I claim from my job W4 if I have expenses from a side business?
According to what I’ve read; if one (single person) has an income from a job AND a home-based or small business (with IRS assigned EIN) – that person may include additional exemptions on their employment W4 to reduce tax withheld from their employment pay check. How is the number of exemptions allowed determined? I can’t find anything about this on the IRS site.
Answer by viajero_intergalactico
you can actually put more exemptions then you actaully have and its ok with the irs. they mainly want to make sure you pay at least 90% of your tax during the year.
but why mess with your w4, since if you have any kind of a profit, you will owe more tax. the wage job’s withheld tax may be enough to cover the tax from your business.
if you put too many exemptions you may not have enough tax withheld and you will have to send in a payment and maybe even a penalty.
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