Question

50 POINTS PLEASE HELP

IN YOUR OWN WORDS PLEASE:)

The purpose of filling out a W-4 is to make it easier for individuals to meet their tax liability by
paying income taxes as they earn income. Paying anticipated taxes from each paycheck
reduces the amount an individual owes when filing taxes and can even result in a tax refund.
To guarantee or increase the refund, individuals sometimes claim fewer allowances (to have
more income tax withheld) or request a specific additional amount to be withheld from each
paycheck.
Daniel's employer will automatically deduct taxes from Daniel's pay using the information on
the W-4 form that Daniel completed on his first day. From his W-4 form, Daniel's employer
determined that $75 needs to be withheld from each of Daniel's weekly paychecks, totaling
$3,900 for the year.
Compare Daniel's tax liability from part B, question 3, with the total amount withheld from his
check: $3,900 for the year. If Daniel wants a refund when he files his taxes, should he have
filled out his W-4 differently? Explain your reasoning.

Answer 1

To determine if Daniel should have filled out his W-4 form differently to receive a refund, we need to compare his tax liability with the total amount withheld from his paychecks for the year.

If Daniel's tax liability for the year is less than $3,900, he will receive a refund when he files his taxes. If his tax liability is more than $3,900, he will owe additional taxes when he files his taxes.

If Daniel's tax liability is exactly $3,900, he will neither owe additional taxes nor receive a refund when he files his taxes.

Therefore, to determine if Daniel should have filled out his W-4 form differently, we need to compare his tax liability with $3,900.

If Daniel's tax liability from part B, question 3, is less than $3,900, he will receive a refund when he files his taxes, as the total amount withheld from his paychecks is more than his tax liability. In this case, Daniel may want to consider filling out his W-4 form differently to reduce the amount withheld from his paychecks and increase his take-home pay.

On the other hand, if Daniel's tax liability from part B, question 3, is more than $3,900, he will owe additional taxes when he files his taxes, as the total amount withheld from his paychecks is less than his tax liability. In this case, Daniel may want to consider filling out his W-4 form differently to increase the amount withheld from his paychecks and reduce the amount he will owe when he files his taxes.

If Daniel's tax liability from part B, question 3, is exactly $3,900, he will neither owe additional taxes nor receive a refund when he files his taxes, and his W-4 form is correctly filled out for his tax situation.

In summary, whether or not Daniel should have filled out his W-4 form differently to receive a refund depends on his tax liability compared to the total amount withheld from his paychecks. If his tax liability is less than the total amount withheld, he may want to reduce the amount withheld to increase his take-home pay. If his tax liability is more than the total amount withheld, he may want to increase the amount withheld to reduce the amount he will owe when he files his taxes. If his tax liability is exactly equal to the total amount withheld, his W-4 form is correctly filled out for his tax situation.