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Adjusting Your W9 to Save More Money

written by: Summer Banks•edited by: Donna Cosmato•updated: 6/6/2011

People often confuse their W9 dependents with their tax filing dependents at the end of the tax year. The dependents listed on your W9 form do not have to match the number you claim and the more people listed, the more money you will bring home.

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    When an employee is hired for a new job, they are handed a W9 Federal Tax form to fill out. The form includes some common personal information, but for the purpose of saving more money, the line the taxpayer should be concerned about the the number of people you support claimed. This number does not have to match the true number of dependents you have at home and can be changed to a higher amount in order to increase the amount of the paycheck brought home on payday.

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    What Is The Difference?

    The W9 dependents are used as a guideline, of sorts, to guide the employer when taking taxes out of the paycheck. The number of dependents and filing status will determine the total amount of taxes (generally) that will be owed at the end of the year. Using this information, the computer software the employer uses to pull the federal tax from the paycheck will determine how much money needs to be taken out and paid to the IRS.

    The trouble with this software is that it does not take tax credits and deductions into consideration. If a person finds they are receiving an income tax refund back at the end of each year and would rather have that money throughout the year instead of in one lump sum, the number of dependents can be changed at any time during the year.

    The more dependents listed on the W9 form, the less money taken out of the paycheck amount and paid to the IRS. The W9 dependents will not affect the state tax taken out of a check nor will it affect any other taxes paid such as Social Security or Medicare.

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    How Does An Employee Change The W9?

    At any time during the year, the employee can ask for a W9 form to fill out. The new form will override any information listed on the previous form. However, the tax changes will only occur on future checks issued by the employer. The paychecks already paid to the employee will not be changed and no credits will be paid to the employee based on the changes.

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    How Many Times Can the W9 Be Changed?

    There are no limits to the number of times the W9 can be changed throughout the year. If the employee needs a bit of extra money for a trip or an extra expense, the W9 can be changed to reflect additional dependents or even a tax exempt status for as little as one or two pay periods. In order to change the W9 back to the original state, the employee will need to fill out a new W9 and submit the form to the employer. There can be a brief period of time between when the W9 status change is filed and the changes are reflected on the paycheck.