need help how many exemptions witholding on w-4

[dmirandamom]

Ok so we were just informed two weeks before our court date to change husbands witholding so we dont get a refund that is too big and forfeit it to trustee I changed my husbands witholding on w4 to 9 our state is ca and it is 5 we usually get back around 4500 fed and 1500 state we def do not want all that going to trustee we went on irs site calculator it said we could put 20 is that right? we dont want to owe irs either is anybody else having same dilema? we have 2 kids Im disabled not blind we are stripping our second we only had 2400 credit card debt the bank bofa would not help with our second 76000 ballon payment an 80/20 loan so chp 13 lien strip was our only option 150,000 underwater on house our plan we will pay 213 a month five years why should we all barely have enough to live on let alone pay all our refund to trustee so unfair sorry im complaining anyways the lawyer said we have to find out how many deductions to put he didnt suggest to us how many please any advice will help

[SMinGA]

Its a wash. Your DMI will go up if you withhold less, making for more plan payment. Or the refund goes to the trustee. You need to figure out what the proper level of withholding is - and change to it - so that going forward you are as close to even as possible at tax time.

You may also need to review the expenses on your schedule J - if you don't have enough to live on, work with your atty to fix...

[UpaCreekinCA]

What CA district are you in? That is what I am afraid of too. I am filing Chap 7, am over the median but can show expenses. All said filing on about $100K worth of debt which includes 2 lawsuits from collection agencies. I was hoping to use my refund for a newer vehicle but it sounds like I should adjust my withholding now and purchase a car before we file. Any suggestions?

[dmirandamom]

thanks for your help everyone we are in in the central district riverside my husband has a old car 17 years I drive the newer one my husband regrets not getting a car for him before this process. No refund for five years we get money back on our refund for our kids and the house interest so this should be interesting. I put us at 9 for irs witholding state is at 5 I talked to a CPA that we will see after our hearing they will charge us 197 to forecast our taxes for 2010.

[daylate]

If you want to save the 197 you could do this:

Are your income and expenses about the same as last year when you got back 4500?

Assume 24 paychecks-if you were doing at beginning of year, change exemptions so that take home goes up about 187 (4500/24)-Since you only have 4 months left this year, say 9 pays, then divide 4500 by 9 and put your exemptions at a level that would produce 500 more take home.Assuming you have kept deductions the same so far this year. Otherwise you'll need to adjust for difference in withholding.

Payroll dept should be able to help you figure out how many to claim to do this

Same with CA taxes-

Not an exact science but it should get you close-

If your are not comfortable with this method, try HR Block or google for another online estimating tool.