How should I fill out my W-4 form?

Question

I have a full time job and make about $40,000 a year. Me and my wife have a daughter together and got married last June. My wife also has a full time job. The W-4 form has always confused me and I just want to be sure that we don't end up owing the IRS at the end of the year. What would be the best way to fill out our forms?

Answer 1

Between you, you can show up to five allowances - one for each of you, one for your daughter, and two for the child tax credit for your daughter. You can't EACH take five, but can split them up between your two W-4's.

Be aware that if you claim the full five on your W-4's total, you could end up owing a small amount when you file your return. If you want to make sure you don't owe, claim three or four total between you.

Answer 2

Take your and your wife's information and use the "withholding calculator" at the IRS site. That will allow you to put in the ytd information and see how close you are for 2007....and the site will make recommendations for the rest of the year.

Keep in mind that the W-4 form stops working so well when both spouses work and the income is more than $50K. (The form assumes you itemize or have lots of kids.) So even if the form suggests M-2 for each of you, I'd put M-1 or S-2 on one or both forms.

Answer 3

You didn't mention how much your wife makes. Whoever makes the most should claim your daughter. That same person should claim the additional 2 allowances for child tax credit with joint income under $85000 totaling 4 allowances: 1 for themselves, 1 for daughter and 2 for child tax credit .

The spouse with less income should claim just 1 for themselves.

Answer 4

Claim married and 0. This would give you the maximum deductions for a married couple. Then at the end of the year you can claim yourself, her and your daughter. You should have a nice refund then.