What would be a better way to claim independents and file taxes when you make 100k per year.?

Question

Thanks for stopping by, but please do not leave an answer unless you're knowledgable on this subject. Okay here goes.....How many dependents should you claim when you get hired if you make 100k per year and at the end of the year you would be claiming your two, your spouse and yourself. Also after you have children and you will be claiming them as well? I know in a lower tax bracket it's better to claim 0 and they take the most out of your paycheck per week and at the end of the year you claim your dependents and you get the most back at that time. In a higher tax bracket is that still the best way to go??? Also my spouse may be working too, and if so then this could affect the amount we actually earn per year in a positive way or a negative one?? This may seem pretty basic to other people, lol but it's confusing me greatly. Thanks for stopping by and helping!!

I wanted to add a little more to my question, sense I wasn't sure exactly how to explain what I was asking. My spouse will only be making approxiamately 15k per year. Also, I guess the summary of my question is... which way would, in order to keep the most of our over all salary, whether it be pay check to pay check or getting some of that back at the end of the year. My worry is that I will still end up owing at the end of the year even after taxes get taken out week to week and we don't want to end up in that situation. Thank you for your responses!

Answer 1

First, you claim WITHHOLDING ALLOWANCES, not dependents on your W-4.

Second, it is NOT better to claim ZERO at lower income levels. This does result in larger withholding, but your refund is an interest free loan to the IRS.

The IRS withholding calculator linked below is designed to help match your withholding to your actual tax liability (the amount they keep). I recommend using it. it accounts for major deductions and non-wage income that change your tax liability.

Answer 2

If your spouse is also working and making a substantial salary, and since you don't have children, then you'd probably be wise to claim married - zero on your W-4. If at the end of the year you get a substantial refund, then one of you, probably the higher paid person, should increase your allowances.

The second salary will essentially start getting taxed in the bracket where the first leaves off, so two-income households, especially if they have substantial income, can come up short at tax time if they claim all the exemptions they're entitled to.

If you have large itemized deductions, you might claim another allowance for that, but if the total is close to your standard deduction, $10,300 this year, leave it alone.

Answer 3

You should always declare the true number of dependents, no matter how much you earn. That "big refund" you think you're getting at the end of the year is just money that you've loaned to the government over the past twelve months - interest free!

You'd be far better off taking your earnings and putting them in a savings account. The more you earn, the more true this is.

Answer 4

since your wife will also be working, do not claim her on your wages, just claim yourself & your childerns. u want to have just enough taken out so that u do not loan money to IRS & then get refund.