Trying to figure out whether to put a 0, 1, or 2 on my W-4. My situation is that I am currently single & have 1 job, I have no dependents and nobody can claim me either, make 50K a year, and I don't rent or own.

What troubles me is that on the W-4 form... line A says put 1 for yourself if nobody can claim me and line B says to put 1 if I'm single and have only one job. That obviously comes out to 2. How would I put down 0? My friends told me they put 0, am I missing something here?

If you follow the directions and put down 2 allowances you should find that the amount of withholding is just about right, assuming you have no other major sources of income, say from investments. If you find that not enough is being taken out you can always submit a new W-4 to your employer with 0 or 1 allowance instead of 2. If your friends are putting down 0, they are probably finding that they have too much taken out of their pay checks and consequently they get a big tax refund at the end of the year. Some people have the strange idea that getting a big refund is a good thing - it's not unusal to hear people "bragging" about how much refund they're due - but all it really means is that they loaned their money to Uncle Sam interest free.

Does this include state as well?

For federal returns, I get like $100 back. But for state I end up owing about $300. I have a feeling I should bring it down to 1 on my W-4.

I don't care much for the year end tax refund being so big, I just don't want to owe.

The W-4 is a federal document, not a state document. Your HR department should be able to tell you how to have more withheld by the state. For example, they may allow you to specify that you want an additional $25/month withheld for state income tax - that should cover it.

I got the same problem!! Last year, I put 2 and at the end of the year while doing my taxes I was even, I didn't owe nor got a refound, but then I was asked if I received the incentive, and I put yes & I ended up owing 250!! Does anyone know why I'm being charged?

I got the same problem!! Last year, I put 2 and at the end of the year while doing my taxes I was even, I didn't owe nor got a refound, but then I was asked if I received the incentive, and I put yes & I ended up owing 250!! Does anyone know why I'm being charged?

Arath:

Like ebaines said, ANY refund is an interest-free loan. From a money management point of viw, you WANT to write a check with your tax return, as long as the check amount does not exceed $1,000 and you can handle making the payment.