I am single, work 1 job making less than 61,000, I had a baby last year, I will be claiming child or dependent care expenses of at least 1,800, and I'm head of household.

When I added it all up I came up with 7 to claim. THis seems like a lot seeing as I used to claim 1.

Is this right? What is the bigger picture regarding my tax refund and claiming 7.

Any help would be appreciated. I am overdue correcting this since I had my son and I need to get it all correct.

THANKS!

Hello J:

Your W-4 has NOTHING to do with what you are going to owe in taxes at the end of the year. It's just a guide to let your employer know how much he should withhold from your paycheck. It ALL evens out at the end of the year.

The question you want to ask yourself is, do you want to let the IRS act as a savings account for you, so that you can get a refund? Or do you want as much money as you can get each paycheck, and you're willing to write the IRS a check at the end of the year...

If you want a refund, claim ONE exemption. Your paycheck will be smaller, but you'll get a BIG refund. If you want as much as you can get each payday, claim the 7 you are entitled to... Just be prepared to have to write a check at the end of the year.

excon

ExCon says it rather well In my opinion.

You will be entitled to a $1,000 Child Tax Credit, plus a somewhat larger standard deduction due to filing Head of Household. Add that to the Child Care Credit, and you have a fair amount of tax deductions and credits available to you.

However, I do NOT think it will be enough to offset the under-withholding associated with claiming SEVEN exemptions. It would be best in my opinion to cut it back to FIVE exemptions.