The impact of claiming dependents on tax withholding and take-home pay is significant. The more dependents you have, the less income your employer withholds for taxes, leaving you with more money in your pocket.
If you have qualifying children under the age of 17 - you are eligible for $2,000 child tax credit on your tax return when you file, which will lower your taxable income.
Claiming dependents lowers your tax liability and the amount you pay in taxes. By estimating your number of dependents, you will have the proper amount deducted from your checks each pay period.
If you would like to have more tax withheld from your checks, you don't have to claim all your dependents on W-4 form and you can claim the overpayment on your tax return when you file.
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