What is the right number to claim on W2?

Question

My husband and I owe taxes this year. That must mean that we are not claiming enough on the w2. Or we are claiming too much. Both of us are claiming 1 each. We have two kids. I want to end up breaking even with IRS and State (California). What is the right number for us to claim so that we don't have to owe next year. We can go right into our employer and do this, right?

Answer 1

ALWAYS claim zero!!
More gets taken out each week, but you will get a bigger refund.
(or not OWE anything).
If you owed a LARGE amount, you can have a set amount taken from every paycheck & put toward the tax for next year....but if you both claim zero, you should be OK.

Answer 2

A good start is the IRS withholding calculator. You can find it at:
http://www.irs.gov/individuals/article/0,,id=96196,00.html

Remember one thing. If you get money back, it is because you paid in too much all year long and Uncle Sam gets to use your money all year interest free. I try to stay within $100 either way, but would rather pay $100 on April 15th than to wait all year to get $100 back.

Also, you stated that you are both claiming only 1 exemption, but still had to pay. It sounds to me like the withholding is not the issue but something else, such as investment or other outside income, not your wages from employment might be the cause. If so, look at paying extimated taxes on those sources of income, if necessary. Otherwise, as long as the amount is not too severe, save the money yourself and make a little interest off of it. Then, bite the bullet on April 15th.

Answer 3

For federal taxes, one or both of you drop your exemptions to zero. Owing tax at the end of the year is fairly common for two income families even when you are claiming fewer exemptions than allowed. If you use Turbo Tax, there is a section to estimate how much tax you will owe next year, and will even print a W-4 for you to turn into your employer. You can also get a copy of the IRS Circular E and use the tables to increase your tax withheld so you can come out close to even.

As another resident of CA, I always seem to owe more tax to CA than to the IRS even when my exemptions are the same for both. I had to lower my exemptions for state taxes so I wouldn't owe so much.

Answer 4

Tell your employer you need to fill out a new W-4 form for your withholdings. When you fill it out, at the bottom be sure to check "married, but withhold at the higher single person rate." This should fix your problem. You should claim one for yourself at the very top of the form and you may either file one or two for the kids, since you have two children. You can also have them withhold an additional 5 or 10 bucks per pay period. There is a place on the bottom of the form for that, if you want.

Answer 5

If you claim 0 you will pay in more taxes and have a greater chance of getting money back. At the very least you won't end up owing as much

Answer 6

zero nothing.