How many exemption can we claim as married filing jointly with 2 kids. We do itemize each year but we don't want to have too much taken as to owe the IRS later. Thank you

If your wife does NOT work, you can claim MARRIED and claim FIVE allowances (one for each child, yourself and your wife, plus ONE because you itemize). The withholding should be enough to cover your tax liabilities without withholding TOO much.

If your wife works, different story! I would need to know how much you each make PLUS what the total of your itemized deductions were.

Yes my wife does work and earns $65,000. I earn $100,000 and our total for itemized decutions is $5,900

If all you deducted last year was $5,900 I urge you to take the standard deduction in 2009 of $11,400

You should both claim SINGLE. The higher income claims ONE allowance and the lower income claims TWO allowances.

The reason for the high withholding is that the FIRST dollar of her $65,000 salary is taxed at the rate of his LAST dollar, i.e. at 25%. The higher combined withholdings will be needed to compensate for the fact that all of her salary is taxed at 25%.