A Silly Tax Question About Payroll Deductions

I'm no CPA either, B., but I would concur with Meg G and (at least) claim the 3, and possibly even 4, deductions. As long as you have that baby in this calendar year, he/she counts as a deduction for this year (hence, all of the babies born on 12/31!).

One thing my husband has done for years is to do some rough calulations half-way through the year (in July) to see where we are, what we've paid in and to make sure that we're not going to owe. Our taxes are far more complicated now than they used to be, so it's more difficult for us to do that now, but this should still work for you. Good luck!

It depends on your adjusted gross income (do you have other deductions -- mortgage interest, for example) and how much you end up owing or receiving at the end of the year. It's better to pay in more during the year and receive a modest refund than end up short and owe thousands in taxes. We had a year when, mid-year and although we actually had a physical family of 4 or 5, we had to change the number of dependents to a negative number in order to avoid scrambling for money to pay taxes come April. The IRS won't allow that to happen 2 years in a row, anyway -- they want their money and will require quarterly tax payments, were that to happen.

Hope this helps.

My initial reaction is claiming additional deductions shouldn't cause you to need to pay in to taxes next year. I'm not a tax attorney, so you may want to get a sample 1040 and complete it based upon your husband's income, and then check the total tax you will expect to owe (if any) and compare it to how much is being withheld from your husband's pay. Based upon some rough calculations for your 2008 tax return that you will file in 2009, I think you would be able to take an approx. $11,000 standard dedecution (assuming you don't itemize dedecutions) along with approx. $14,000 in personal exemptions (including your new child), which would leave you with no more than $21,000 of taxable income based upon your husband's current salary. And that is at the highest end since it doesn't take into account any pre-tax deductions that may already be taken out of your husband's paycheck at his work (eg., health insurance). On $21,000 of taxable income, the tax would potentially be approx. $2,700; however, you will still probably get a $2,000 child tax credit for your 2 kids, leaving you with $700 in tax. If your huband's paystub shows more than $60 in federal income tax withheld, then I would suggest that you have your husband amend his W-9 with additional exemptions and resubmit it to his payroll department. He might even claim more than 4 exemptions (maybe even 5). We currently claim substantially more than 4 exemptions even though my husband and I only have 2 kids currently. Good luck.

i would claim one for everyone in the house, including your hubby. then when the baby is born you could have him change his exemtions to 3, then you'll find yourself in this same situation next year. i think once you get all the math done,you'l find yourself in a great spot. you probably will have paid in too much (unless your hubby makes pretty stinkin' good money)and they'll owe you. good luck! meg

It just depends on if you like the bigger refunds at tax time or want to pay a little. We claim one less because we like to have the refund and want to make sure we won't be paying any taxes as that is a tough time of the year to be paying as we have a lot of birthdays in those months and usually still broke from Christmas. My parents claimed all their dependents one year and ended up having to pay and had to pay penalties as well because they didn't have the money and had to go on the pay plan so that was a horrible experience and took 3 years to pay it off as they add penalties and interest so takes forever to pay off a few thousand dollars and now claim 0 because they are scared that will happen again. With kids you may not have the problem as they have the child tax credit now for your income level so you will probably still get a refund or it will get deducted from that amount if you have to pay in. I just don't want to take any chances with owing anything in the end so we claim 4 instead of 5 every month and always get a tax refund every year.

I skimmed through the advice and it looks like some good 'food for thought'. I just thought I would add something - in case lots of other people have voiced their opinions.....I think MO and KS can be very different w/ regards to how the state taxes turn out - so if someone advises you who lives in KS ---that may not apply to you. (Which is why I am not voicing an opinion here- we live on the KS side and have been repeatedly advised not to claim all the exemptions - we could claim 5 and dh claims 0...and we get an extremely modest amount back each year. And our state tax is always more than our fed.)