Publication 505 - Tax Withholding And Estimated Tax (Page 5 of 49) in pdf

If you and your spouse expect to file sepa-

Phaseout. For 2003, your deduction for

who is not able to care for himself or herself so

rate returns, figure your allowances separately

personal exemptions is phased out if your ad-

that you can work or look for work. For more

based on your own individual income, adjust-

justed gross income (AGI) falls within the follow-

information, get Publication 503, Child and De-

ments, deductions, exemptions, and credits.

ing brackets.

pendent Care Expenses.

Instead of using line F, you can choose to

Alternative method of figuring withholding

Table 1.1

take the credit into account on line 5 of the

allowances. You do not have to use the Form

Deductions and Adjustments Worksheet, as ex-

Single . . . . . . . . . . . . . $139,500 – $262,000

W-4 worksheets if you use a more accurate

plained later under Tax credits.

Married filing jointly or

method of figuring the number of withholding

qualifying widow(er) . . . $209,250 – $331,750

allowances.

Child tax credit (worksheet line G). If your

Married filing separately . . $104,625 – $165,875

total income will be between $15,000 and

The method you use must be based on with-

Head of household . . . . . $174,400 – $296,900

$42,000 ($20,000 and $65,000 if married), enter

holding schedules, the tax rate schedules, and

“1” on line G for each eligible child. Enter 1

the 2003 Estimated Tax Worksheet in chapter 2.

If you expect your AGI to be more than

additional if you have three to five eligible chil-

It must take into account only the items of in-

the highest amount in the above

dren or 2 additional if you have six or more

come, adjustments to income, deductions, and

bracket for your filing status, enter “0”

eligible children. If your total income will be be-

tax credits that are taken into account on Form

on lines A, C, and D. If your AGI will fall within

tween $42,000 and $80,000 ($65,000 and

W – 4.

the bracket, use the following worksheet to fig-

$115,000 if married), enter “1” on line G if you

You can use the number of withholding al-

ure the total allowances for those lines.

have one or two eligible children, enter “2” if you

lowances determined under an alternative

have three eligible children, enter “3” if you have

method rather than the number determined us-

Worksheet 1.1

four eligible children, or enter “4” if you have five

ing the Form W – 4 worksheets. You must still

1. Enter your expected AGI . . . . . . . .

or more eligible children.

give your employer a Form W – 4 claiming your

2. Enter:

An eligible child is any child:

withholding allowances.

$139,500 if single

•

For whom you claim an exemption,

$209,250 if married filing jointly

Employees who are not citizens or residents.

•

or qualifying widow(er)

If you are neither a citizen nor a resident of the

Who will be under age 17 at the end of

$104,625 if married filing separately

United States, you usually can claim only one

2003,

$174,400 if head of household . . .

withholding allowance. This rule does not apply

•

3. Subtract line 2 from line 1 . . . . . . . .

Who is your son, daughter, stepchild,

if you are a resident of Canada or Mexico, or if

4. Divide the amount on line 3 by

grandchild, adopted child, or foster child,

you are a U.S. national. It also does not apply if

$125,000 ($62,500 if married filing

and

your spouse is a U.S. citizen or resident and you

separately). Enter the result as a

•

decimal . . . . . . . . . . . . . . . . . . .

Who is a U.S. citizen or resident alien.

have chosen to be treated as a resident of the

5. Enter the number of allowances on

United States. Special rules apply to residents of

lines A, C, and D of the Personal

For more information about the child tax

Korea, Japan, and India. For more information,

Allowances Worksheet without regard

credit, see the instructions in your Form 1040 or

see Withholding From Compensation in chapter

to the phaseout rule . . . . . . . . . . .

Form 1040A tax package.

8 of Publication 519.

6. Multiply line 4 by line 5. If the result is

Instead of using line G, you can choose to

not a whole number, increase it to the

take the credit into account on line 5 of the

next higher whole number . . . . . . .

Personal Allowances Worksheet

Deductions and Adjustments Worksheet, as ex-

7. Subtract line 6 from line 5. This is the

plained later under Tax credits.

maximum number you should enter

Use the Personal Allowances Worksheet on

on lines A, C, and D of the Personal

page 1 of Form W – 4 to figure your withholding

Total personal allowances (worksheet line H)

Allowances Worksheet . . . . . . . . .

allowances for all of the following that apply.

Add lines A through G and enter the total on line

Only one job (worksheet line B). You can

H. If you do not use either of the worksheets on

•

Exemptions.

claim an additional withholding allowance if any

the back of Form W – 4, enter the number from

•

of the following apply.

line H on line 5 of Form W – 4.

Only one job.

•

You are single, and you have only one job

Head of household status.

at a time.

•

Deductions and

Child and dependent care credit.

•

Adjustments Worksheet

You are married, you have only one job at

•

Child tax credit.

a time, and your spouse does not work.

Fill out this worksheet to adjust the number of

•

Your wages from a second job or your

your withholding allowances for deductions, ad-

Exemptions (worksheet lines A, C, and D).

spouse’s wages (or the total of both) are

justments to income, and tax credits. Use the

You can claim one withholding allowance for

$1,000 or less.

amount of each item you can reasonably expect

each exemption you expect to claim on your tax

to show on your return. However, do not use

return.

If you qualify for this allowance, enter “1” on line

more than:

B of the worksheet.

Self. You can claim an allowance for your

exemption on line A unless another person can

1) The amount shown for that item on your

Head of household (worksheet line E). You

claim an exemption for you on his or her tax

2002 return (or your 2001 return if you

can file as head of household if you are unmar-

return. If another person is entitled to claim an

have not yet filed your 2002 return), plus

ried and pay more than half the cost of keeping

exemption for you, you cannot claim an allow-

up a home for yourself and your dependent or

2) Any additional amount related to a trans-

ance for your exemption even if the other person

other qualifying individual. For more information,

action or occurrence (such as the signing

will not claim your exemption or the exemption

see Head of Household under Filing Status in

of an agreement or the sale of property)

will be reduced or eliminated under the

Publication 501.

that you can prove has happened or will

phaseout rule.

If you expect to file as head of household on

happen during 2002 or 2003.

Spouse. You can claim an allowance for

your 2003 tax return, enter “1” on line E of the

Do not include any amount shown on your last

your spouse’s exemption on line C unless your

worksheet.

tax return that has been disallowed by the IRS.

spouse is claiming his or her own exemption or

Child and dependent care credit (worksheet

another person can claim an exemption for your

line F). Enter “1” on line F if you expect to

Example 1.1. On June 30, 2002, you

spouse. Do not claim this allowance if you and

claim a credit for at least $1,500 of qualifying

bought your first home. On your 2002 tax return

your spouse expect to file separate returns.

child or dependent care expenses on your 2003

you claimed itemized deductions of $6,600, the

Dependents. You can claim one allowance

return. Generally, qualifying expenses are those

total mortgage interest and real estate tax you

on line D for each exemption you will claim for a

you pay for the care of your dependent who is

paid during the 6 months you owned your home.

dependent on your tax return.

under age 13 or for your spouse or dependent

Based on your mortgage payment schedule and

Chapter 1 Tax Withholding for 2003

Page 5

Publication 505 - Tax Withholding And Estimated Tax Page 5

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