Scenario:
My wife makes $10,000 a year more than me, do I since I make less money on my W4 claim 0 and she claim herself and the baby? Or the other way around?
2007-01-06 17:41:17 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Truckercub has it spot on. Go to www.irs.gov and fill out a couple of W-4's - one for her and one for you. That will tell you what to do. You can even fill them in and, when you are happy with the results, print them off and hand them straight to your employer (remember to cut off the bottom bit!) Please do take the time to read ALL the instructions, otherwise you will end up paying too little. If you take the time and effort to do this, there is no reason why you cannot do it properly. The idea is to have as small a refund as possible at the end of the year. That way, you have enjoyed the use of the money all year.
Many people use their tax refund to clear credit card debt which has piled up all year. It is much better to have more money in your paycheck, pay more off the credit card each month and carry a smaller balance. Think of all the interest you can save!
The link to W-4 is on the top left hand corner of the IRS home page.
2007-01-07 02:19:03 · answer #1 · answered by skip 6 · 0⤊ 0⤋
They take more out of the paycheck if you claim 0. So if u want less money in paychecks and bigger tax refunds then do that. She can even claim zero. Just because you have a baby doesn't mean you have to claim them on w-4's. My personal preference is for my fiancee and I to both put 0, and make do with the little paychecks. And then have a big bulk payment at tax time. I love big amounts of money!
2007-01-07 01:59:59 · answer #2 · answered by Kim 3 · 0⤊ 0⤋
Depending on a lot more circumstances, the general answer would be to let the person who is making the most money claim zero in order to have sufficient taxes paid in. However, since there is not interest charged and if you are disciplined, have the least taken out and invest it and even if you have to pay taxes, you will have earned some interest.
2007-01-07 01:46:26 · answer #3 · answered by bama_cid 3 · 0⤊ 0⤋
why let the goverment have a tax free loan. either have your wife claim 3 and you 0 and joint file at the end of the year or she does 2 you 1 and file seprate. Do the #'s and find out how you can pay less during the year and get the most back at the end of the year and go that way.
2007-01-07 02:01:00 · answer #4 · answered by truckercub1275 3 · 1⤊ 1⤋
If you are going to file married filing joint I would say there is no difference. The two of you combined becomes "the taxpayer". What is withheld will be added together. If one is over withheld and the other under withheld, that fact will not show on the return.
If filing joint, the issue is to be sure that you two combined have enough withheld to avoid any surprises or penalties yet maximize your take home pay. Get Turbo Tax or try the IRS' on-line calculator from the link below.
2007-01-07 14:10:35 · answer #5 · answered by zudmelrose 4 · 0⤊ 0⤋
If the child's parents file separate returns, use the return of the parent with the greater taxable income to claim the child.
More info:
http://www.irs.gov/publications/p929/ar02.html#d0e2097
2007-01-07 01:45:13 · answer #6 · answered by Anonymous · 0⤊ 1⤋
I would probably have her claim zero because she makes so much. That way come taxtime, you guys will get more back. Because they will have taken out more from her because of what she makes.
2007-01-07 01:48:50 · answer #7 · answered by CJ 2 · 0⤊ 0⤋