NEED Tax help

[mom2dea]

Hello everyone I don't post alot but I read almost all the time here .

I am trying to get some info without hiring someone ..... Here is some background :

Me and Dh are 25 yrs old we have 3 kids all 6 yrs old and under Dh claims nothing (0) on his W-4 forms . He has 30% taken out of his paycheck :
5% for 401K
5% for best buy stock
20% for income taxes

I did a fake est of what our tax refund would be and I come up with 6200.00 Last yr we got almost 7000.00 .

My whole point is can someone explain how claiming more people will help us ? How much extra will it put in his paychecks ? Is it worth it now to change anything ?

The reason why we are talking about this is Dh gets paid to go to school (GI bill) and he wants to quite cause he never sees me or the kids . But honestly we can not afford for him too and I am trying to come up with an extra 1000.00 a month to help with the bills and this is one way I was thinking about (I am thinking of many things to come up with the 1000.00 )

THanks for any help

Sarah M

 

[mickeyfan2]

If you got a $7000 refund last year that would be 7000/52 (if you are paid weekly) for an increase of $134. You should at least claim 5 (one for each family member).

 

[missymagic]

Federal dependent deductions The more dependents you claim the less money they take out of your check weekly. So right now claiming zero you get more back at the end of the year. If you claimed 4 or 5 you will get more money in weekly check and less at the end of the year. Just don't sell your self short if you do 5 you could end up owing taxes that way.

 

[disneysteve]

OMG! A $7,000 refund! If anyone wants to make me an interest-free loan of $7,000 just let me know.

Seriously, go to this site:
http://www.irs.gov/publications/p919/index.html

That IRS publication will walk you through the process of calculating the proper witholding so that you don't get such a huge refund. I know some people think a refund is a good thing but all it really means is that you have overpaid the government and let them hold on to YOUR money for a year and pay you no interest for the privilege.

 

[MikeL1515]

Federal dependent deductions The more dependents you claim the less money they take out of your check weekly. So right now claiming zero you get more back at the end of the year. If you claimed 4 or 5 you will get more money in weekly check and less at the end of the year. Just don't sell your self short if you do 5 you could end up owing taxes that way.

Now I am wondering, should I change my 'number of exemptions' from 0 to 1? Will it make that much of a difference in my paycheck? I got about $3000 last year without the 'child tax credit'. Should I change it? Will it only be a couple dollars a pay?

 

[majimikate]

Listen to DisneySteve...big refunds = big loan to the USA for free. By claiming more exemptions you will decrease the withholding in your husband's paycheck, increasing his weekly or biweekly take home pay. Depending on the rest of your circumstances, you may still get a refund based on the child tax credit, earned income credit, schedule A deductions etc. I would speak to an accountant, they can look at your previous returns and give you the best advice based on your past filings and current pay stubs that print your current income and withholding on them.

Good Luck!!!