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Tax Law (Questions About Taxes)/Question on how many allowances to claim on W4

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Question
Hello John,

Me and my wife are curious to see how many allowances we should claim on our W4.  We both work and plan to file our taxes jointly.  We also have one child in daycare.  My wife makes twice as much as I do.  

As of now, my wife claimed one on her form, and I claimed one.  For both of us that would equal two.  At one time we were both were claiming two which would be a total of 4, but we had heard from several people that it was too much and we may have to end up paying come tax time.

I wanted to ask an expert to see what a conservative amount would be for us to claim and if one of us should claim more.  This can be so we can maximize our checks, but at least get a refund and not end up owing the IRS money. We also plan on having another kid, so when that happens, how much do we increase our claim?  Thanks so much for your help.

Answer
Nick,

Thanks for your question.  There is no easy answer, trial and error works best.

Having said that, I would stick with 2 withholding allowances between the two of you. This assumes that you have minimal income not subject to withholding and either take the standard deduction or do not have an extremely large amount of itemized deductions.  

When you have a second child, if you have been close to break-even, you might choose to add one more withholding allowance.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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