Hi. I am married and I have one child. We own a home if that matters. How many deductions should my W-4 have? What about my wife’s W-4?
This is a great question and a common one for folks trying to use the new W-4 form! The new form (established in 2020) is set up a little differently. After you complete your biographic information at the top, Step 2 will ask you about multiple jobs. In your case this may play a significant role to ensuring you are withholding the correct amount. There is a tiny check mark in that section under Step 2 (c). It says “If there are only two jobs total, you may check this box. Do the same on Form W-4 for the other job. This option is accurate for jobs with similar pay; otherwise, more tax than necessary may be withheld.”. Checking this box tells the company you are working for that both of you work and they should withhold at a higher rate; otherwise, they may withhold too little.
The second section that will be important for you is Step 3 for dependents. If you make less than $400,000, then you will write in $2000 for each dependent under age 17. So, 1 dependent would be $2000 and when you have 2 it would update to $4000.
Finally, step 4 is a catchall which allows you to withhold additional tax if you would like. Sometimes withholding is more of an Art than a science, so if you and your spouse get your first pay slips and not enough has been withheld, then you can update your W-4 to add a little more withholding each pay period. Sometimes it takes a few pay cycles to get it completely dialed in.
I hope that answers your question! If you have any additional questions, please give TurboTax a call anytime. We would love to hear from you and help in any way we can.
Have a great day!
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