My husband claimed 6 tax exemptions... Is that too much?

Question

My husband just started a new job. When filling out the tax papers, he claimed 6 tax exemptions.
- one for himself
- one for me
- one because I don't work
- one for our baby

and I'm not sure what the other 2 were for. He got his first weekly paycheck and only $1 came out for federal. Could we end up owing money at tax time next year? Can he go back and change the number of exemptions? Should he?

*Thanks. I obviously have no clue when it comes to this.

Answer 1

When filling out your W-4 document your first week of work, remember this: The greater the number of exemptions, the less money the employer will take out of your paycheck for withholding to the IRS and state income tax. The whole point of following the instructions on the W-4 is to help you estimate how much money you should be withholding from your pay checks.

The typical American with children will be receiving a tax break for their personal exemptions (you and your spouse), the children's exemptions, approximately $1,000 per child from the child tax credit and the additional child tax credit, and your itemized or standard deduction. The W-4 attempts to calculate the effect of your income against these tax breaks based on a formula.

However, if you aren't worried about that, and don't want to be withholding income tax payments from your paycheck, you can claim exemption from income tax withholding on the W-4. You're only supposed to do this if you had a refund in the prior year of all of your withholding and plan to have another refund in the following year.

Additionally, you can withhold the maximum by entering a zero for the number of exemptions on your W-4.

Hope that helps!

Answer 2

It might end up causing you problems by having to pay at tax time next year, but might not if his income is fairly low. You'll get a $1000 tax credit for the baby, in addition to exemptions for all three of you. Plus if his total income is under about $30,000 a year, if you file a joint return you'll probably get an earned income credit - if his income is closer to $20K, it could be pretty large so you'd probably be OK. There's a worksheet on the W-4 form - if he filled that out accurately, you'll probably be close to even at tax time.

He can file a new W-4 and change the number of allowances anytime, but might not have to. But if his income is over around $25K a year, might be better to be claim maybe 4 and see how this year's taxes come out, then increase the allowances if you get a big refund.

Good luck.

Answer 3

You can claim whatever you want on your W-2. No one audits them.

But if you end up oweing taxes at the end of the year, there will come a point where you pay a penalty on it. You're required to "pay as you go" throughout the year, and you can do that either by having taxes taken from your wages or by making deposits at your bank.

Normally, it's safe for you to claim (in your situation) married with 3 exemptions, and if you do, you'll likely end up with a refund at the end of the year. 4 would eliminate that refund, but 6 seems excessive.

(This doesn't apply if you have more than one source for wages. You would need to claim a total of 3 between all your jobs.)

If you want to just check to see how you're doing, find out your total year-to-date income so far through April 30, muliply by 3 to give you an estimate for the whole year, and mulitply by 3 the amount of taxes withheld as of April 30, also. Then just follow this formula:

total wages
--minus married-joint standard deduction
--minus three deductions for the people
equals total taxable income

Look at the 2006 tax tables and see if you're over or under for the year (based on your estimate). If you're under, you need to have more taken out. If you STILL show a refund, then you might be okay.

(Keep in mind that little bundle of joyous tax credits you have in the diapers there. You get $1000 of credit toward your taxes plus a bit more for EIC if your income is low enough. Add these amounts to the total tax that you've paid in. Check the 2006 EIC tables for the amount you can expect back for that.)

Answer 4

You could end up owing money if not enough tax is withheld. Perhaps he is anticipating deductions like mortgage interest, and real estate taxes and other deductions reducing your tax liability. The best way to know for sure is to go to an accountant (or someplace like H&R Block) and they can calculate what your tax liability will be for 2007 and then you'll know if enough tax is being withheld. Remember, it's ok to owe a little bit at the end of the year but if you owe too much then you'll get hit with an underpayment penalty and interest as well. So find out what you'll owe and then you'll have some peace of mind.

Answer 5

It is better to claim "0" exemptions, taking 6 out only means that next year you will need to come up with money to pay IRS back all the money. Yes he should go back and change his w4,
(to get an idea how much money should he should be taken on his pay check look at the this year tax booklet and it shows how much you earn per year and how much taxes you should of had taken out during the year.)

Answer 6

Ok on a W4 you do not claim exemptions, you get allowances. The withholding calculator will get you close enough to where you won't be due such a huge refund, or owe. $7200 is a lot of money IRS holds for you all year without interest to you. $7200 is a lot of money you are having to do without each payday. The worksheet states you qualify for 6 allowance not exemptions. The worksheet is correct. good luck....

Answer 7

I gave EVERYONE a thumbs down. There is not enough information in your question for ANYONE to give you a good answer about have many ALLOWANCES you should claim. Based on you question, It looks like he completed the worksheet on the W-4 properly. The 2 'extra' allowances are probably for the Child Tax Credit (line G on the worksheet).

I always recommend the withholding calculator on the IRS website. See the second link below.

Answer 8

He can claim as many as he wants when starting a new job,
or even changing it later.

However, in your husband's case...when he files the Internal
Revenue 1040, 1040A etc...he has to claim only the proper
ones. Say now, yourself, himself and the baby. If he can prove he is supporting someone else also, over 50 per cent of it..then he can claim them.

Looks to me as its money in the pocket every week now....
when it comes to next April 15th.....he is going to owe alot
of money...including penalty and interest.....!!

Answer 9

He can't claim you twice. Anyway, the whole thing isn't smart and yes, you'll know why at the end of the year/early next year.

Answer 10

One because I don't work... wrong!
Thiswould be disallowed in a heart beat.
You say 6, but list 4. What are the other two for? Unless there are two more children somewhere, no good.