new father, claim 0,1,or 2 on w4....0,1,or 2 on w2 for tax return?

Question

im a new father and kinda confused on what to claim. all year ive been claiming 0 on my w4's for work, doesnt that mean they take a lil more out but get a larger return. should i now claim 1 so my checks will be a lil bigger now i have a child. and how about my tax return, my dad told me to claim 2 when filing so a can get a larger return back. thanks

Answer 1

if you claim zero, they do take out more taxes, but you usually get a refund at the end of the year.
if you one or higher, you get more money back throughout the year, but you MAY end up owing at the end of the year.

honestly, if you can afford to claim zero still, i would. if your income is substantial enough where you can take care of your son, as well as pay bills then do it. if you really feel that you need the extra money then claim 1. i wouldn't go so far as to claim a 2 until you have another child.

as for your tax return i'm not really sure what your dad was talking about. if you claim 2 that means married filing joint lol ;) i'm pretty sure he's talking about exemptions, in which case you'd have 2 exemptions anyway. you will get the regular exemption for yourself, then another for your child(he's a dependent). here's one thing you have to remember when filing though, if you aren't married(meaning you aren't filing jointly with the child's mother), you have to decide which one of you is going to claim the child on their taxes, because both of you can't. however, if you have sole custody of the child, and provide the majority of care for said child, you get the exemption.

i hope this cleared it up a bit, if you need more explaining just email me =)

Answer 2

Because of the exemptions- you only get an exemption PER PERSON, not PER JOB. The $70 refund is correct. If you were to add the numbers together from the two W-2's and enter it as one (I am not saying to submit it like this, just to calculate) it will give you the same $70 refund as adding the two to the return seperately. When you enter the two W-2's individually, it is calculating the exemption for each as if it is two different people, but it is not. Be happy, though- those that have their W-4's filled out properly should break even or owe a small amount/be due a small refund (such as the situation you find yourself in). Tax refunds are not free money- we get significant refunds but it is because we never changed our withholdings when we married and had our children. We are OVERpaying our tax liability and are being refunded the difference. To correct myself, there ARE some free credits that some people get- basically free money that they are "refunded" that they never paid in. That is not relevent to your question, though.

Answer 3

Base the w-4 on what you earned last year, and what you claimed last year, so if it was 2 last year, this year it's 3.
When you estimate your taxes by downloading forms, schedules and instructions from -
www.IRS.gov you will be able to determine if you're getting money back.

It should represent what you will owe in taxes, and be the closest break even amount.

You need to use your money for bills and not a savings account receiving no interest by giving extra taxes each paycheck to the IRS. You would not loan your money to a bank with no interest, so why loan it to the IRS with no interest.
Some think it's a way of saving because they have no self discipline. - ok then.

GOD bless America.
CPA-retired