Message Font: Serif | Sans-Serif
No. of Recommendations: 1
I tried searching through the site to find the answer and
couldn't find one. My husband and I are a little confused on
how we should each claim ourselves as on our W-4's. We
got married in January, had a son in June, and I make more
than him. I'm basically a tax idiot and with the 0-1-2-etc. to
file as, I'm confused! Help us!

If you each took one exemption last year, single, and it was correct, or you got a refund, and one of you add one for the child for ALL of this year (and next year) the marriage penalty would have you overpaying. Since your adding the exemption late this year, you'll be overpaying even more in 1999.

You are allowed to comple a W-4 so as to pay the correct amount of withholding, regtardless of whether the number of exemptions makes sense or not. Therefor, if you want to NOT overpay, try to estimate this year's tax and adjust your withholding for the rest of the year so that the total for the year for both of you is just over 90% of the estimate. Change one ( or both) W-4 to achieve this with as many exemptions as are necessary. Next year, adjust your withholding again so the total withheld by both of you in 2000 is just in excess of 1999's actual tax. Keep doing this as long as your income increases, or stays the same, each year. If you have another child, make the estimate adjustment again in that year.
If you understand this, and want to know why, I'll be glad to explain, but basically you're meeting withholding tax "safe harbors" so if you underpay you won't owe any penalty, and you won't be falsifying a W-4. Ed
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.