Posted: 3/23/2011 6:10:22 AM EDT
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For the past few years my wife and I have had our W4's claim "Married, but withhold at higher Single rate" and 0. I realize I am giving the government an interest free loan, but I want to fix it but do not want to end up having to pay them. So here goes my question(s):
We both work full time. I make more money than she does. Combined income is between 50K-60K. Currently have no children, but there is one on the way! (Due August 30th!!!  )
We do itemize on our tax returns- house taxes, student loan interest, education expense, charitable donations. So how many allowances should I claim to keep me as close to breaking even as possible? I realize this is different for everybody since everybodies situation is a little different. I was thinking of just moving them to "Married" claiming 0 and see what that does. But should I go in and change it in August after having a baby? Thanks for any advice! |
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Quoted:
For the past few years my wife and I have had our W4's claim "Married, but withhold at higher Single rate" and 0. I realize I am giving the government an interest free loan, but I want to fix it but do not want to end up having to pay them. So here goes my question(s): We both work full time. I make more money than she does. Combined income is between 50K-60K. Currently have no children, but there is one on the way! (Due August 30th!!! )
We do itemize on our tax returns- house taxes, student loan interest, education expense, charitable donations. So how many allowances should I claim to keep me as close to breaking even as possible? I realize this is different for everybody since everybodies situation is a little different. I was thinking of just moving them to "Married" claiming 0 and see what that does. But should I go in and change it in August after having a baby? Thanks for any advice! Claim as many as you legally able to claim, since in theory the deuctions are set up to be "correct" for the situation, if your goal is too put as much cash in your pocket as legally possible on payday rather then get it back after filing yearly income taxes. If you want to be cautious, then set aside money each week ($100 say) for the end of the year in the event you owe money. At the very least you're collecting interest or have the money on tap if need be, rather then getting a check back from the feds. When I first started my own business that was my plan, $100 a week into a savings account. I was married, the sole income earner, buying my home and had 2 children. After all the business writeoffs and other deductions I ended up getting $1K back. I stopped setting money aside for paying taxes after that. When I went back to being an employee and joined the Union, I was amazed by the guys I worked with talking about getting $10K tax refunds after claiming 0 all year when they were in a similar situation as me with a stay at home wife and a couple kids. Having an extra $200 a week on my check was better then having a $10K check in April the next year to me, since that went to paying off debts and putting food on the table. To the best of my knowledge you'll be credited the entire year with the child provided you get a social security number for it prior to filing 2011's taxes. You could claim now and have less withheld from your checks. You can claim 2 for each "child" as well if you earned less then $125K as a family, or something similar. You'll need to read the details on the W4. Don't listen to the HR tards, READ THE W4 INSTRUCTIONS. |