Best Answer:
You don't fill out the W-2, Your employer does that. You fill out the W-4 before you start the job. What you put down tells the employer at what level tax es are withheld. If you claim zero, more taxes will be taken out. The more exemptions you claim, less taxes taken out. This applies to federal and state income taxes, and possibly local income tax (not everywhere). It does not apply to FICA (Social Security/Medicare) which is a fixed rate that everybody pays. You do not get a refund of those taxes.
If this is your first job and you are living with your parents who support you, and you expect to earn less than $6,300 the rest of the year, you can claim 'Exempt' on the W-4. This way, no income tax will be taken out and you don't need to file a tax return in 2018. But if you think you might be close to that $6,300, do NOT claim exempt. Instead, claim 2 or 3. Should you go over $6,300, you will start owing income tax, and if you end up owing anything (not enough tax was taken out during the year), it will not be much. If you claim exempt and then owe something, you were not exempt and you can be hit with a tax penalty. You don't want that.
If you are just starting your working life, the time to learn this is now. Getting a big tax refund is NOT wise management of your money. People who plan on getting a big refund every year so they can spend it are lacking in money-management skills, and probably do not save at all for their future. A tax refund is the SAME THING as an interest-free loan to the government. THEY get your money all year, a little bit every week or two weeks, and then, the amount you did not owe them is sent back to you a year later with no interest.
Wouldn't you rather have that extra $10 or $20 or more per paycheck for yourself? Put that money into savings and investments, let it work for you instead of for others. I just wrote Uncle Sam a check this week to pay the amount of tax I underpaid during the year. People don't understand that, but the bottom line is you owe what you owe, and that is based 100% on what you earn and what deductions you have. That number IS what it IS; it doesn't change. What can change is the amount of tax you overpay (refund, no interest to you) or underpay (pay the tax you owe, no interest to the government in most cases).
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