[warreng151]

Hello there I am wondering what I should be claiming on my W-4's if I recently bought a house? I bought my home for $320,000 I have a 1 daughter and another one due in August. I will make around $100,000 this year and my wife does not work. Oh yea I live in California. I don't want to screw myself for next years taxes but if I can get more money than I will. Thanks:confused: :confused: :confused:

[ebaines]

If you follow the directions on the W4 form you should have your answer for how many allowances to claim - see:
http://www.irs.gov/pub/irs-pdf/fw4.pdf

In your case you probably want to take a total of 5 allowances: 1 for yourself, 1 for being married with one job, 1 for your wife, and 2 for your children. If you plan to itemize (which you most probably will now that you are a homeowner) follow the directions on page 2 to determine if you should take more than 5 allowances.

Each allowance reduces the amount of income they withhold tax on by $3,500. So in your tax bracket (25%), each allowance reduces your withholding by about $875/year. If next year you find that too much tax was withheld, you can always resubmit another W4 with a different number of exemptions. You are correct that you don't want to pay too much withholding - you'd like have the cash now rather than wait for a refund next April. On the other hand, if you claim too many allowances you will have to come up with a payment for the IRS next April, and if you end up owing too much you could also get socked with a penalty for under-withholding. So play it a little conservatively.

[AtlantaTaxExpert]

You can claim SIX exemptions with no problem due to the Child Tax Credit and the $24,000+ in itemized deductions.

Anything above that and you may have a problem.