2013 Tax Estimate

[amylevan]

We've had some significant changes to our income/deductions for 2013. We just had our second child, and I have decided to become a SAHM. So we are looking at an additional dependant and a bit more than 1/3 less income (although we'll be losing the daycare deduction...).

I hate getting huge tax refunds (I do not like interest free loans to the government) and I don't really want to blow our budget with having to owe a large amount either. I assume we should modify my husband's W-4, but I don't know by how much. How does everyone estimate thier taxes for the upcoming year?

(And we don't have an accountant....I prefer to do our own taxes.)

 

[floridafam]

I believe Kiplingers has a three step calculator that can give you a general idea. Google "Kiplingers three step withholding calculator" and you should find it.

 

[Claire&TheBoys]

There is also a worksheet on the W-4 that will tell you how many allowances to use for your husband's paycheck. We have 2 children and he claims Married with 4 allowances. I think the worksheet also advises you to add another allowance for each child to account for the child tax credit, but we don't do that. I never count on that being renewed from year to year and I don't want to be under-withheld. We typically get back somewhere between $500-1500, not a huge amount but enough that it covers my income, too (I work p/t but not enough hours to where I have much withheld for taxes each paycheck).

 

[goodeats]

I use the calculator at IRS.gov. I try to break even as much as possible. I think my DH ends up claiming 17 on his W-4 due to our other deductions. It's a complicated calculation so you need to understand all your taxes to make sure you don't screw it up. If you under-withhold there is a penalty.