I just retired from active duty Air Force and now have a civilian job and I'm unsure how many exemptions I should claim on my W-4. I have a wife, that works, and two daughters, 3 & 6 so we pay child care for both. We also own a house. Any ideas?

Just follow the direction on the form. You would appear to want to claim 4 allowances:

1 for yourself
1 for your spouse
2 for your children

I am assuming that your wife makes more than $1500 and has an "appropriate" amount of taxes withheld from her pay check. Depending on the details of your situation - what tax credits you can claim, how much your wife earns and is having withheld, etc - you may find that this results in too much or too little being withheld. The objective is to make it so that come April you either owe just a little bit in taxes or the IRS owes you just a little bit in a refund. If after you do your taxes you find that this results in too much or too little being withheld, you can submit an updated W4 to your employer.

Hello G:

Ebaines is, of course, right on...

There IS another approach to take, if it interests you... Some people can't save a nickel no matter how hard they try. In order to save, they NEED a forced savings plan. The IRS can BE your forced savings plan.. I don't recommend it because it doesn't pay interest... It DOES, however, preserve principle.

As noted, the idea above is to NOT be owed a big refund, unless that's EXACTLY what you want. If that would be something that would interest you, you could claim 0 exemptions, and get a whopping refund next February.

excon