I'm married with 1 child. My husband and I both claim Single 0 on our w4. Is this wrong?

Question

How does this effect our tax return when we file jointly? Last year (our daughter was born in Oct '06) we filed jointly with one dependent and our usually substantial tax return really suffered. What did we do wrong?

Answer 1

Always figure your taxes both ways, i.e. Married Filing Separately with one claiming dependent, and Married Filing Jointly with one dependent.

With both claiming single -0- you should receive better than average refund.

Answer 2

First of all, why your refund suffered was probably due to the fact that even though you were claiming S-0, your combined income (you and your husband) would most likely have been significantly higher than while you were single. That could have pushed you into a higher tax bracket. Instead of 10% you might now be in the 25% bracket. Therefore even though you were having more tax taken out, the higher tax bracket ate up your refund.

Normally it is more advantageous for a married couple to file MFJ, but in some situations where their incomes are close to equal, it can be better for them to file MFS, and take advantage of the lower tax bracket.

There really is no right or wrong answer to the question of is my withholding correct. Assuming you are having enough withheld to avoid an under withholding penalty, you can really do what you like.

You'll see answers saying that by getting a big refund you are essentially giving the government a tax free loan of your money. That's true. But on the other hand, if you aren't a good saver, getting a big refund is really a way for you to force yourself to save.

If you were to survey all of the tax contributors who have their own practices, you would see that most of them would have clients with both views.

Personally I have clients who want the biggest refund possible, others who want to get as close to $0 as possible, and others who want to pay as much as possible (so they don't loan their money to the government).

REMEMBER - IT"S WHAT YOU FEEL COMFORTABLE WITH THAT IS CORRECT.

Answer 3

You do realize that your refund just means that you overpaid that much all year, and gave the government an interest-free loan of your money.

It's not wrong to claim single/zero, but you're cutting down on your paychecks from what they could be. You can file your W-4 as single, but when you actually file your return, you can't file as single, your choices are a joint return or married filing separately.

Not sure what you mean by filing joingly with one dependent. If you mean that you claimed your daughter, and that was the year she was born, your refund should have gone UP quite a bit unless something else changed substantially. If nothing else like your income or withholding changed much, and your refund decreased when you claimed your daughter, you definitely did something wrong. Without seeing your return it's impossible to say what. If you want to post more details, somebody can help you figure it out.

Answer 4

Did you take the extra child credit? Or include any daycare expenses? There are quite a few extra exemptions you can take when claiming a child. I'm surprised that if you're used to a refund already that your daughter's extra exemptions didn't give you even more of a refund.

It's always best to have the correct amount taken out of your pay all year long for taxes. It would better to have Married and zero or Married and one on both of your W-4s. I think you could even claim Married and 2, but they'd take out less taxes throughout the year meaning you'd get a lower refund come tax time -- but the pro to that is you get more money in your paycheck all year.

Answer 5

There is a spot on the W-4 where you can have an additional amount withheld from each paycheck. I don't recommend you do this if you only owe $56. The government is going to take your money, keep it without paying interest to you, and then give it back to you at the end of the year. You are much better off to continue to have your tax liability come very close to the amount you paid even if it means you owe a little in the end. By the way, there's no such thing as making too much money to deduct your 401k contributions. 401K contributions are automatically deducted because your employer takes them out of your paycheck BEFORE they compute your taxes, and your taxable income on your W-2 reflects that already. In most cases, deductions such as medical insurance premiums and also taken before taxable income is determined. PS, Missy is wrong. If you file a joint return with your husband, you can't file head of household.

Answer 6

No, it is not wrong. It is only a matter of do you want more or less money on your paychecks thoughout the year because, after you file your tax return its going to come out to the same amount of money (pay now or pay later, or recieve now or recieve later). Same in the end.

Answer 7

It is not wrong, It is better to get a refund from the IRS than to owe. The penalty and interest charges are very high. So look forward to having extra cash and maybe use it to take that vacation you been looking forward to or pay off a bill.

I much rather get a refund, I don't care if IRS is making money off of me, at least they won't be killing me in penalties and interest.