Another Tax Question

6 Replies
JMar - January 10

My husband brought home a W-4 form to fill out. My question is we've always claimed "0" before. Should we change anything since we've had our son. The way I understand it is by claiming "0" they take more from your check and you may get a bigger return at the end of the year. I'm not very knowledgeable on taxes. Can anyone clarify for me? Thanks.

 

TC - January 10

Yes, that is true. They will have to "pay you back" for the money that they took out. I hope that someone can explain better bc I think I suck at explaining.

 

Narcissus - January 10

I think that you will need to claim 1, for your child, if you want to be eligible for any tax credits that are offered for families with children. I may be wrong so you should call the IRS to clarify this.

 

kellie - January 10

My husband & I always claim "0" all year and then get a big tax refund at the end of the year. It is like a savings plan for us!

 

Jbear - January 10

You can keep claiming zero, unless you would do better getting a little more on his paychecks now than a big refund at the end of the year (it won't change the refund you'll get this year, only next year). If he makes a lot of money, you might want to keep claiming zero, to be absolutely sure you don't end up owing.

 

Marys Jaime - January 10

JMar, the W-4 is a form that is used to determine the amount of tax witholding that your employer should subtract from your pay and send to the IRS. As said above, claiming zero exemptions means that a higher level of taxes is witheld. The number of exemptions depends not only on the number of kids you have but if you itemize (use schedule A for mortgate interest and taxes paid, charity, etc). So you have purchased a home the number of exemptions will increase as well. However, it is up to you to determine how much you want to send to the IRS, after you do your taxes you will get a refund if you paid too much. I used to be a tax specialist for one of the big public accounting firms. If you have any other questions, let me know. :) BTW, letting the IRS keep your money though the year is not very smart because they do not pay you any interest. You are better off putting that money where you can get some return for it.

 

Heidi - January 10

I've thought that too, that it sucks they take it all and they probably make money off it it and then you don't get any interest for what they were holding onto. Sure it's like a nice savings account come tax time. We got like $6000 back last year but no interest and it would have been nice to get that extra in a paycheck instead!

 

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