W4 claims family changes All,
I have a couple questions about tax claiming as we have had a few changes in the family.
Details:
State: CA
Joint income: ~$145K
Married, one child
My wife and I were married April 2014, and had our first child Feb, 2015. We did not change our W4 claims in 2014 (we both claimed single, one exemption) but did file 2014 as 'married, jointly'. We received a combined State/Fed return of ~$3,000.
After the baby was born I changed my W4 claims to: Married, 3 exemptions. My wife has not yet made any change to her W4.
My next paycheck after W4 modification was ~$400 more take home. This concerns me as I don't want to owe money at the end of the year.
When filing as single most of my working years I'd normally receive a tax return of around $3,000 from State and Federal combined. I was always ok with that as I looked at it as an end of year bonus of sorts. Now I'd like to make it to where we are not paying as much during the year but still not owe any money at year end either.
Ideally, about $500 combined refund (filing Married, one child) would be great.
Questions:
1. Am I claiming too much by changing my W4 to 3 exemptions? Should my wife and I both claim Married 3 exemptions?
2. For our 2015 tax filing we will also be able to claim a dependent (child) deduction. As this is our first child I don't know much about what that will or will not do for us. How will this deduction effect our W4 claims choices, if at all? I.E. does it allow for us to claim 3 (if is is not a good idea otherwise) given our desire to not owe any money when we file for 2015?
Any guidance is greatly appreciated. Please let me know if am am not being clear with any of this info.
Thanks in advance,
Herb |