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Question

I want to know if it is better to clain my daughter and I, or just myself for tax purposes? I claim us both. And what is the difference as for as federal deductions. Is it more or less taken out per check if I claim 1 instead of two and the too with the return at the end of the year. * I hope that this is a clear question * Thank you.

Answer 1

For deductions from each paycheck, less would be taken out if you claim 2 than if you claim one.  Unless you have a very high salary, it's probably $7-10 difference each week.  If you have less taken out, then your refund at the end of the year would be less by that amount.  It's the same total money, the difference is when you get it, in each paycheck or at the end of the year.

It's your decision.  If you need the money through the year, then claim more on your W-4.  If you prefer to use it as enforced savings and get a bigger refund, then claim 1.

Answer 2

You will have more taken out of each check if you have 1 W-4 allowance than if you have 2.  So if you want to take more home each week, declare 2.  If you want a bigger refund at the end of the year, declare 1 or even 0.

Answer 3

Do you mean "claim" on a W-4 or "claim" on your tax return?  You can estimate gross vs. net pay at www.paycheckcity.com.

Answer 4

If you mean claiming your daughter on your 1040, unless someone else has the right to claim her, it is always better to claim her on your tax form.  This will allow you to pay less taxes because you should be able to claim Head of Household vs. Single.  Plus, you get to claim the Child Tax Credit and possibly Earned Income Credit.

If you mean on your W-4 for withholding purposes, if you add her as an allowance, less taxes will be taken from your paycheck each period which will mean that if you normally get a tax refund, it will be smaller.  If you normally owe, you may owe more.

At the moment, I claim 5 allowance on my W-4 and I am PLANNING on owing about $200 when I file my 2008 taxes.