claiming dependents on pay?

Question

I am married and have 2 kids. We receive a large refund each year but I would like to start seeing more in my check weekly. Currently my husband and I claim single with no allowances. I do not want to owe each year in April, maybe get a small refund to pay bills. What is the most we can claim to at least break even or get a small refund?

Answer 1

You could claim Married with 4 and he Married with Zero. That way you should break even or have a small refund. As long as you don't claim more than 4 you should be OK. Now to be safe, I'd have the lower wage earner claim the 4 and the higher wage earner the zero.

If you have a 401k at work, please think about contributing to it at 5% or more. You will save for retirement and get tax benefits plus in most cases, employer matching. By having more in your check after changing withholding, you could put some of that extra money in a 401k or IRA.

Answer 2

Without knowing your income and tax situation, there is no way to acurately determine exactly what you should be claiming. If you own a home and itemize deductions, the simple methods above won't work. Since you get a large refund, your exemptions are too small. Your best bet is to raise your exemptions 1 on the smaller income and see how much difference it makes. If not enough, up it again. You can change your W-4 values as much as you like. You are definutely not restricted in any way to the number 4 since that is the number of people in your family. I personally have a large family but have Married and 40 exemtions since I do not pay much tax and I do not want them to take anything out during the year. This is dangerous in cases of income fluctuation, but I do not have this problem currently, so it works just fine for me.

H&R Block does have a W-4 estimator form that they can fill out with exactly the amounts you have and want for a refund. It does not take long to fill out, but will get you real close without having to keep guessing until you are happy with the results. As a tax preparer for Block, I've had the training recently. it's a pretty cool tool.

Answer 3

Single and 0 means that you pay the most in weekly and get a large refund. You should each safely be able to go to married and 4. With 2 children, you'll get a $2000 child tax credit. If you have a tax preparer, ask him or her and they can run the numbers for you.

Also if you qualify for Earned Income Credit, you can get a portion of that each week in your check by filling out a W-5 at work.

Answer 4

Since there are two of you and 2 children, that makes a max of 4 personal exemnptions you can take.
Unoficially, I 'd suggest each ofyou claim single, 0, or married, mzero, and see what happens.
Take your last refund , divide by 52, and see of you see that much more in your take home.
Personally, I prefer a large refund, if you have to replace an appliance or want to buy something big, you can do it on a cash basis. It never fails, around refulnd time, the washer goes, or I need a major car repair.

Good luck.

Oh, you might want to see a preparation service, like HR Block. They do stuff like this for free.

Answer 5

You can take your information to a tax prep place and they can run the numbers for you and tell you the answer to your question.

Otherwise, change your W-4 to "married" with 4 allowances for each exemption on your return. Then part way through the year you can predict what your taxes are from your pay stubs and make adjustments to your W-4 if necessary.

Answer 6

At least 4, split between you however you want to. If one or both of them is under 17 so you can get a child tax credit for them, then you can probably claim even more, depending on your income, and still be OK at tax time.