I am a UK citizen working for a non profit organisation in Minnesota on an H1B visa. My wife and child are here with me on H4 visas. I arrived on August 26th and the plan is to be here for a few years. I am wondering how to complete my W4 to maximise cash in hand while avoiding a big payment down the line. Due to the First-Year choice I believe I will be able to file my 2012 tax returns as a resident alien. However I have read that I cannot claim my wife and child as exceptions on the W4 as they do not have SSNs/cannot work. Is there a way around this? How many exceptions can I realistically claim on my W4?

When you file for 2012, you will apply for ITINs for your wife and child.

As for completing the Form W-4, they do NOT require your wife's and child's ITINs.

Claim MARRIED with THREE allowances, if your employer allows it. That is what you should claim if you will be filing jointly.

Thanks a lot ATE. This bewildering issue is slowly making more sense! My employer permits me to fill the W4 as I believe to be correct therefore I was concerned about claiming too many exceptions and getting a big bill next year.

Glad to help!