Child Tax Credit?

Question

Child Credit Tax?
My question is My fiancee and I have 1 daughter right now, and one will be here in Oct. We're getting married in July. I'll be working and she wont be working. So what should I claim on during the year? 2 or 3? And where will the Child Credit come in affect?

Answer 1

If you're working and she's not, and by the end of the year you'll have two children, you'd be safe claiming 4. If she is working for most of the year, cutting that back to 3 might be wise.

The child tax credit comes after your tax is calculated. With two children, you'd get a $2000 credit or the total amount of your tax, whichever is lower since the CTC can only reduce your tax to zero, not below.

Answer 2

What you claim depends on all your income including wages, interest, self employment, etc. It also depends on whether or not you want a refund (giving the government an interest free loan for the year) or not.

I would go to the IRS web site and download a copy of a 2007 W-4 or follow link below.

http://www.irs.gov/pub/irs-pdf/fw4.pdf

You can follow the instructions to get a good idea of what to claim.

When you say "Child Credit," I'm not sure what you mean.
There is the child tax credit of $1000 per child. you should get that if your income is under a certain amount and you have a tax liability greater than $0.00.

The "Child and Dependent Care Credit" is available only if both you and your wife work or if either is disabled, looking for work or a student.

The "Additional Child Tax Credit" is only available if you did not receive the full Child Tax Credit, and your income is over a certain amount.

There is also the "Earn Income Credit"