What should my husband and I claim on our w4?

Question

I have been employed all year in 2008 and my husband has not been employed this year but just started a new job yesterday.

I want to change my allowances as we do not want to owe at the end of the year.. I currently claim 4, but when I filled out the worksheet & used the calculator on the irs website on back of w4 it advised for both of us to claim 0. I'm not sure that's what we should do but would like some advice on what he should claim on his w4 and what I should claim on mine to either break even at the end of the year or have a small refund. My gut instinct tells me that both of us should be claiming 2 but would like to know what others are doing. Any help would be much appreciated! This tax stuff is way over my head and seems to get more complicate once you're married and begin to acquire "stuff"

Answer 1

What is your projected total income since he is now working?  Income above $65,000 is taxed at 25%, below $15,000 only 10%, and $15,000-$65000 at 15% (but remember these will change for 2007-2008). If your income level is above these with him working for 6 1/2 months with your salary combined, you should probably claim either 0 or 1 this year. Look at your last paystub and the total tax paid so far this year.  You can easily calculate about what you will pay in tax (based on 2007) using last year's 1040 form (just print out a copy at www.irs.gov).  Use approximate numbers, take the standard deductions for married filing joinlty, and your exemptions ($10,700 for married, plus $3400 per person) and subtract this from your projected total salary.  See where you stand-with your claiming 4 for a good 6 months you are probably way behind!  You don't want to owe over $1000 or you will be penalized.  Congrats on your husband finding work!  Claim 0 if you feel it is safest (and don't feel like calculating as I described) since you are used to living on less at this point I am sure! But remember even if claiming 0 is not withhlding enough tax, you can ask that an additional amount be withheld each paycheck.  And you can change your W-4 as often as you need to, there is no limit.  Without knowing your income level ($50,000?  $200,000?) I can't help you more.

Answer 2

Why are you claiming 4?  You don't say if you have any children.  Just follow the W-4 instructions.