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Courtney receives most of her income from wages from her job as a high school teacher. She also receives supplemental income from freelance tutoring part-time during the summer. Because her tutoring income is not subject to withholding, Courtney is concerned that she will have a balance due at the end of the year. Which of the following is an option you can recommend to Courtney to avoid a balance due?

a. Claim an exemption from withholding.
b. Investigate whether she qualifies to classify her tutoring income as a hobby rather than as business income.
c. Send a notarized letter to her employer requesting that they withhold additional amounts from her pay each month.
d. Use the IRS Tax Withholding Estimator to determine her estimated tax obligation and complete a new Form W-4 if necessary.

Respuesta :

Martebi

Income tax exemptions are given based on some specific sources of income and not on the total income. The option I can recommend to Courtney to avoid a balance due is for her to claim an exemption from withholding.

An Employee can have an exemption from withholding, when the said employee can use Form W-4 to know if the employer should not to deduct any federal income tax from wages.

To claim, An individual must earn less than the income tax thresholds laid out by the IRS, and the individual should not owe any tax.

If one do not owe any tax, the employer of that person should not withhold money from the paycheck of the employee to pay the IRS on his employee's behalf.

You can stop this withholding by filing for an exemption from withholding on your W-4.

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