http://genxfinance.com/start-2007-off-right-by-reviewing-your-w-4-exemptions/ Helping a unique generation achieve financial independence. Fri, 18 May 2012 12:26:36 +0000 hourly 1 http://wordpress.org/?v=3.3.2 http://genxfinance.com/start-2007-off-right-by-reviewing-your-w-4-exemptions/comment-page-1/#comment-1160 moom Sat, 10 Feb 2007 19:32:45 +0000 http://genxfinance.com/2007/01/02/start-2007-off-right-by-reviewing-your-w-4-exemptions/#comment-1160 The "safe harbor" clause means that you don't have to withhold more in 2007 than you paid in tax in 2006. It doesn't make sense to pay any extra than that as you can just save the money and earn interest on it. But after filing your 2006 return it makes sense to check your withholding for the rest of 2007 is sufficient to cover at least the amount of tax you paid in 2006. It's a little more complicated than this if you are at higher income levels - there then is a step up of the basis from one year to the next. The “safe harbor” clause means that you don’t have to withhold more in 2007 than you paid in tax in 2006. It doesn’t make sense to pay any extra than that as you can just save the money and earn interest on it. But after filing your 2006 return it makes sense to check your withholding for the rest of 2007 is sufficient to cover at least the amount of tax you paid in 2006. It’s a little more complicated than this if you are at higher income levels – there then is a step up of the basis from one year to the next.

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