Last tax season, more than 75% of taxpayers received a tax refund, and the average refund was over $3,000. You can get started now with TurboTax and get closer to your tax refund, and if you have questions on your taxes, you can connect live via one-way video to a TurboTax Live tax expert with an average of 12 years of experience to get your tax questions answered from the comfort of your couch.
As you may already know, the IRS issues tax refunds when you pay more tax during the year than you actually owe. When you file exempt with your employer for federal tax withholding, you do not make any tax payments during the year. Without paying tax, you do not qualify for a tax refund unless you qualify to claim a refundable tax credit, like the Earned Income Tax Credit.
The tax law requires your employer to withhold federal income tax from each paycheck you receive and send it to the IRS on a quarterly basis. At tax time, your employer provides you with a W-2 Form that reports the total amount of taxes withheld during the year. When you sit down to do your taxes, if the taxes you owe are less than the total amount withheld, the IRS will send you a tax refund for the difference.
Generally, if you are self-employed and expect to owe $1,000 or more, you are required to make income tax payments every three months throughout the year. If you have questions, we have TurboTax Live Premium tax experts, available in English and Spanish, to help you with your personal and business income and expenses.
Filing exempt from withholding
When you start a job, your employer will ask you to fill out IRS Form W-4. The W-4 helps you estimate the amount that should be withheld from each paycheck based on the tax information you provide. To claim an exemption from withholding, you must meet certain criteria. If you had even $1 of tax liability in the prior year or anticipate earning income in excess of the sum of your standard deduction ($13,850 single, $20,800 head of household, $27,700 married filing jointly), you cannot be exempt from federal tax withholding in the current year.
For example, if you file as single on your 2023 taxes, you must not anticipate earning income in excess of the standard deduction of $13,850. If you still claim exempt from withholding and earn income in excess of this amount, you will probably owe some taxes unless you qualify for refundable tax credits like the Earned Income Tax Credit or the Child Tax Credit.
Update your W-4
If you are unable to claim exempt from withholding, you can still reduce the amount that is withheld from your paycheck by updating your W-4 and changing your withholding. There is a redesigned IRS W-4 now called the W-4 Employee’s Withholding Certificate instead of the W-4 Withholding Allowance Certificate that has been updated to reflect changes under tax reform.
The IRS W-4 was redesigned to align with changes under tax reform and to help taxpayers figure out their correct withholding after tax law changes. One of the biggest changes on the W-4 form was the elimination of personal allowances since allowances were tied to the dependent and personal exemption which were eliminated. The redesigned W-4 will take into account whether you can claim the Child Tax Credit and whether you can claim tax deductions other than the standard deduction, both of which can reduce your withholding.
Refundable tax credits
A refundable tax credit means that even if you have zero tax liability before claiming the tax credit, you may still get a tax refund. Refundable tax credits not only reduce federal taxes you owe, but they also could result in a tax refund even if the tax credit is more than the tax you owe. For example, the American Opportunity Tax Credit that covers certain higher education expenses is 40 percent refundable, and the Earned Income Tax Credit is fully refundable, so if you are eligible for these tax credits you may see a tax refund even if you paid no income tax for the year.
No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.
Hey Lisa, I have a question me & my fiance live together( we have all year) he didn’t work all year and I have an earned income of 24,000 yet I owe Unemployment from the prior year. My question is since I pay for his medical, rent, food, clothing Etc.. Can I technically claim his as a dependent?
ok i worked all year except in the summer when i received unemployment for two months and i didnt allow them to take out taxes of that money will that mess up my tax return?
Hi Lisa,
I’m freaking out because I just realized I claimed 9 on my W-4 when I started my job in Febuary.I have 2 young kids and made $22292.00 this year.From what I can see on my Paystub I dont see any federal withholding being taking out.All the Tax calculators say that I will get a rather large refund back.Is this possible if I had no federal withholding?
Hi Lisa.
I recently heard that once a year you can elect to not have any taxes withheld from your check. Is this true?
Hello Lisa,my name is Barbara.I filed exempt all year on the advice of a co-worker who says she has filed exempt for years and since she has 3 children, has always still got a decent tax refund. Me being a struggling single parent,am still leary. Could you explain to me if she is telling the truth? I mean basically if filing exempt all year would affect mi eitc. I have 2 kids.
Hi Lisa
I exempted for only 9 months have 2 kids, and making 10/hr. Am I still eligible for EIC & child tax credit? Thanks 🙂
Hi Tammy,
It is possible that you are still eligible since EITC is a refundable tax credit and the child tax credit is partially refundable. Refundable tax credits can still qualify you for a credit even if you did not pay in taxes. I am not sure what your total income is and both credits do have income limitations, but please take a look at
https://blog.turbotax.intuit.com/2012/01/30/what-is-the-earned-income-tax-credit-2/ and
https://blog.turbotax.intuit.com/2011/12/13/a-guide-to-child-tax-benefits/ for information on income limitations and age requirements for dependents.
Thank you,
Lisa Greene-Lewis
To catch up on some bills, someone told me we could claim Exempt for 5 weeks a year and still get a tax refund (not owe). We also have a 3 year old, so we get that credit. Just wanted to see if 5 weeks is the cut off, or if we can go a couple more weeks.
Hi Melissa,
There is no cut off for the amount of time you can claim 5 exemptions. It all depends on your tax situation(how much income your earn and how much deductions you are eligible for). There are requirements for claiming full exemption where you don’t have any taxes taken out of your checks. This doesn’t sound like the case for you.
You can use our W-4 salary calculator to help you estimate your exemptions. Here is the link
https://turbotax.intuit.com/tax-tools/
Thank you,
Lisa Greene-Lewis
https://blog.turbotax.intuit.com
Hey Lisa
I worked for 6 months as an intern in US. I received my W2 form in Feb 2012. Unfortunately since I was travelling, I forgot about the form. Is it possible I can claim my tax refund. Could you please help as how I should proceed.
Thanks
Prabu
Hi Prabu,
Don’t worry you can still file your taxes using TurboTax to file your 2011 taxes. TurboTax will ask you the appropriate information to complete your 2011 taxes. You can get started here https://turbotax.intuit.com/
Thank you,
Lisa Greene-Lewis
Hey Lisa I hope your still checking this, I have a ? about filing exempt. I can only work part time about $8000 for the year, and also get food stamps (about $2400 for the year) Last year i made around $7500. Should i be filing exempt or even filing at all? Every little bit helps and if I can not have taxes held out that would be great. Thanks. Oh also im 31, single with no kids.
Hi Jason,
You should be able to file exempt. In addition, you should still file your taxes, because you may be entitled to various refundable tax credits like the Earned Income Tax Credit, which can give you a credit even if you didn’t have any taxes due.
TurboTax will help you get your tax refund when you file your taxes.
Thank you,
Lisa Greene-Lewis
I work full time and earn commission. The way my employer has set up the earning codes for my commission wages results in me being taxed over 40% on commissions. My regular wages are taxed at 22.5%.
When I used TurboTax this past April to file taxes, there was no way to me to distinguish differences in earnings types, or indicate that I have grossly overpaid on my commission earnings. My tax return was almost non-existent.
Is there a way for me to file my W4 such that I do not pay taxes on going, instead pay lump sum at the end of the year? Since I cannot make a distinction between earning types, the taxes at the end of the year should be calculated based on my true net earnings, and thus be more accurate.
Please let me know how this can be accomplished. Thank you