If you are a mom working as an employee in a company, let us see how the tax rules apply to you.
Your pay would include your regular pay, bonuses and commissions. It could also include any other expense allowances and reimbursements. In most cases, your employer would withhold a certain amount from your pay to be paid to the IRS as your income tax. If your income tax is low enough that you are not liable for taxation, this amount will not be withheld.
The income tax withheld by your employer would depend on a few factors such as:
1. Your income
2. The information provided by you on the W-4
The information given by you on the W4 would include your marital status, the number of withholding allowances you claim and if you want any additional amount withheld. The completed W-4 form should usually be given to the employer at the point an employee starts work in the new company. If there is a change in the information on the W-4 later on, it can be altered by filling a new form. If factors such as your marital status or the number of allowances you claim change, please give your employer a new W-4 within 10 days.
Once you have given your W-4 to your employer, check if the income tax withheld from you is too much or too little. If too much or too little tax is being withheld, you must give your employer a new W-4 form. Form W-4 has worksheets for you to figure how many allowances you can claim. These worksheets are for your use only. Do not give them to your employer.
If you are married and filing jointly, use one set of worksheets to figure your withholding allowances. You can take your combined income, allowances, deductions and exemptions into account when figuring this. If you are married and filing separately, then use separate sheets to figure this out.
It would be helpful to use the Withholding Calculator available on the IRS website- http://www.irs.gov/individuals/article/0,,id=96196,00.html, to calculate your withholding amount accurately. If you have had too much or too little withheld as you federal tax , your tax situation has changed or starting a new job, this Withholding Calculator would be very helpful. The instructions on using the calculator are available on the site.