[jmagical5]

My husband makes about 110,000 I make about 30,000 annually. I claim zero he claims one. We have three children under 7 yrs. Old. Should we continue to file the way we have been? We usually get about 8,000 back a yr. own a home, also he itemizes tools he may buy. Taxes pulled from his pay are huge! What should we do?

[tickle]

What exactly do you mean, he itemizes tools he MAY buy? Does he do this on his income tax?

Something isn't right here, your family income is huge and you say you get 8000 back a year but at the same time the income taxes pulled from his pay are huge. I think most people would like to be in your shoes. I don't see your problem.

[ScottGem]

Do you like loaning Uncle Sam money interest free? If so, then continue the way you are. But if not I would have him increase his exemptions to at least 5. 1 for each child, 1 for you and 1 for the house.

You should try to get so you get or pay a small amount at tax time. For example, for as long as I can remember, I have gotten a refund of less than $100, sometimes I've had to pay, but again, less than $100. You just have to make sure you don't claim too many exemptions so that you under withhold by more than $1000. The IRS doesn't like that.

If you like the idea of getting a large sum at tax time, then put away the difference between his current take home and the new take home into a savings account.

[AtlantaTaxExpert]

Scott has it right: ANY refund is an interest-free loan to the government.

However, increasing exemptions from ZERO to FIVE may be over-doing it for 2008, though it's okay for the rest of 2007.

Go with THREE exemption starting in 2008.