How do I fill out my W4 form...

[Kelemvor]

Wife and I have gotten huge tax refunds the past couple years so I need to redo my withholding forms for taxes.

I'm currently set to Married and 3 withholdings for state and federal but we had a son last year so we now have 2 kids.
Wife is a stay-at-home mom but is a Pampered Chef consultant so she does make money now and then.

Here's the Federal W4 form to reference:
http://www.irs.gov/pub/irs-pdf/fw4.pdf?portlet=3


I'm thinking it should be:
A: 1
B: 0 - wife makes more than $1500/yr
C: 1 - probably have 0 currently
D: 2 (2 kids) - probably have 1 now
E: 0
F: 1 - probably a 0 now, have day care costs over the amount.
G: 4? make under $90k total, 2 kids

H (Total): 9?

Going from 3 to 9 seems pretty drastic. I don't want to go too far and end up paying money, just don't want to have thousands of dollars coming back at the end.

So what would anyone recommend?

Should I go middle of the road and try 6 for a year and see how it goes? hmmm.

---

Hmmm... now that's tax season, I wonder why we don't have a sticky on the subject... oh wait, we do!

Zim Hosein

Off Topic Moderator.

 

[nickbits]

Each exemption is worth a 3500 deduction.

So...

Take your marginal tax rate and multiple it by the W9 number and 3500. If that number is less than your refund you should be "safe".

 

[polarmystery]

close this thread and ask Eaglekeeper in the tax sticky. I asked almost the exact same question and he was quick to respond. He'll know.

 

[Vette73]

Do a 5 or 6.

 

[MrChad]

http://www.paycheckcity.com/W4/w4instruction.asp

 

[zebano]

I think I do 5 (2 kids).

 

[Kelemvor]

Originally posted by: polarmystery
close this thread and ask Eaglekeeper in the tax sticky. I asked almost the exact same question and he was quick to respond. He'll know.

Oh yeah, forgot it was still tax season. I'll go post it over there.

Thanks.

 

[alkemyst]

Originally posted by: nickbits
Each exemption is worth a 3500 deduction.

So...

Take your marginal tax rate and multiple it by the W9 number and 3500. If that number is less than your refund you should be "safe".

not on a W4.

I claimed 3 (no kids, but own a home generating a lot of interest payment each month)....I got back $600...just about perfect.

 

[dullard]

Originally posted by: nickbits
Each exemption is worth a 3500 deduction.

So...

Take your marginal tax rate and multiple it by the W9 number and 3500. If that number is less than your refund you should be "safe".

Bingo. If you want ~$1000 less refund (and thus get your $1000 months earlier), just add one more exemption. For ~$2000 less, use two more exemptions. Etc. The exact numbers depend on your income levels and other factors. But this doesn't need to be that exact.