I am married and have 1 baby, is it worthing claiming 1 on our W-4 because we have such low income?

Question

We recently went through a dramatic job loss and lost 2/3 of our income. We are barely able to keep food on the table after we pay out our bills each month. We have consolidated as much as we can. We both currently claim 0 on our w-4 tax forms, so is it worth changing these forms to claim 1 (since we do have a dependent anyway) to free up a little more money each month? I realize we will get less back on our tax return at the end of the year. I just want to make sure we wont OWE any moneyeither. We do own a house also. We live in Colorado (if that makes a difference)....Thanks for any info or advice :)

Answer 1

With two of you plus a baby, you could probably claim five total between you on your W-4's and still about break even - three for the three people, plus two for the child tax credit. If you want to be safe, one of you claim one, the other two for a total of three - you will very likely still get a decent refund. If your total income between you is under around $36,000, you will probably be eligible for an Earned Income Credit also.

Good luck

Answer 2

I think you definitely should claim at least 2, maybe 3 exemptions on your W-4. Otherwise, it looks like you are giving too much of an interest free loan to the government. The W-4 comes with some instructions. I would go through the instructions step by step. You definitely should claim more than one. I am single and have been claiming 3 for years. At the end of the year I still get a little back, especially if you are making a mortgage payment, which is a tax deduction.

Answer 3

Best answer is filing Married;you claim 2 and she claims 0 ,since you have the higher income and both work.Single is withheld at a higher rate than married,and would give you a bigger refund through heavier taxes.If you don't have enough withheld due to a raise,then lower it to married claiming 1on a joint filing.The one with the highest income claims the most to keep the income in a lower tax bracket.Once you have kids,you do the same thing.I always claim 4 dependents on W-2,even though I have five.Because we are right between the 15-25% rate for middle income filiers.And I work a lot of overtime that is under-taxed.If wife does not work,then you might have to reduce it to 1 exemption to avoid having to pay in April.

Answer 4

Try to estimate your taxes for the year with the income you have received and the income you expect for the year. You want to reduce the taxes for the rest of the year so that you do not overpay for the year. You may put down more than 3 for the rest of the year. You can reevaluate for next year.
I would say 3 as the minimum but it depends on your income. Since you own a home that will usually increase your W4. I live alone but have 2 and maybe should increase it.
If money is tight you should increase your W4.

Answer 5

I would claim what ever dependents I could. If you own a home and are making monthly payments, you should have a good deduction for interest. At this point, you need income. I would not worry about the taxes. Good luck. I hope you can find suitable employment soon.