How many dependants can I claim? Single Mother of 3.?

Question

I am a single mother with 3 kids. I am currently claiming 3 dependant exemptions on my W-4 at work. I was thinking about claiming more so that my paycheck is more each week. However; I want to make sure I get money back when I file my tax return next year. Should I leave it at 3 or claim more?

Answer 1

You can claim more, but it may affect your return and you may owe.  If you can itemize your tax return at the end of the year (ie because you are a homeowner) this will help boost your return.  However, if you do not have the ability to itemize and use the 1040EZ for your return, you usually will get screwed out of the big tax breaks.  Look into a financial/tax advisor one year and ask them to help you get a better return.  

Answer 2

Technically, you can claim as many as you want.  However, the more you claim, the less money you will pay in taxes and the less likely you will be to receive a tax refund.  Check with your HR department (or whoever does payroll) to see how much each additional exemption would affect your withholdings.  Then look at last year's taxes, calculate how much you actually paid in taxes (withholdings minus refund) and divide by the number of pay periods (if you get paid weekly, 52, or bi-weekly, 26).  That will tell you approximately where your break even point is.  Compare it with the info you get from the payroll people and see where the numbers fall.