Question

Dependents and breaking even

Forum|Forum|1 year ago
July 18, 2024
2 replies
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Hello,

We are a married couple filing "married filing jointly" when we file taxes. My wife is a stay-at-home mom, so she does not earn any income at all. We have two children 11 and 9 years old. For dependents, should I be claiming 2 (for just the children) or 3 (for the children plus my wife)?

I plan to continue to support my wife financially as long as she would like so that she does not have to work. Per our 2023 tax return my total earnings were $149,000 (taxable income was $121,877) but, if she wanted to get a part time job, what would be the max she could earn per year and not put us in the situation where we would now owe taxes instead of receiving a refund? Is there mathematical calculation to figure that out (would like to be able to figure it out on our own once we can no longer claim the children as dependents)?

Thank You

rjs

Employee

You can never claim your wife as a dependent. Filing jointly gives you all the benefits of having the additional person.

Whether you owe tax or get a refund is not based on a specific amount of income. It depends on how much tax is withheld from your pay, compared to your total tax for the year. The amount of tax that is withheld is determined by what you put on the W-4 form that you give to your employer. If you both work you can use the Tax Withholding Estimator on the IRS web site to figure out what you should each put on your W-4 forms. It will show you how to adjust your withholding to get the approximate refund amount that you want.

S

SAHM1Author

Thank you for your response. So since my wife does not work would it benefit us to put 2 dependents (for our two children) on the w-4?

sorry another dumb question, what is "Your total tax for the year" ? how is that calculated?

Thank you for your time

rjs

Employee

"So since my wife does not work would it benefit us to put 2 dependents (for our two children) on the w-4?"

It depends on what you mean by "benefit." Adding dependents on your W-4 will reduce the amount of tax that is withheld from your pay, so your take-home pay will increase. The reduced withholding will mean you get a smaller refund when you file your tax return. To see what the effect would be of changing the number of dependents you can use the Tax Withholding Estimator on the IRS web site or the TurboTax W-4 Calculator.

"what is 'Your total tax for the year' ?"

For the purpose of this discussion, your total tax for the year is the amount on Form 1040 line 24.

O

Opus 17

Employee

The best thing to do is use the calculator on the IRS web site or fill out all the worksheets and all the instructions on all 4 pages of the W-4.

If you are planning on using the standard deduction and have no other unusual tax circumstances, you would enter $4,000 on step 3 and leave it as-is. The W-4 by default assumes you are the only working spouse, and the tax tables will account for the larger standard deduction for MFJ. If you plan to take itemized deductions, or have other unusual circumstances, you can follow all the instructions and worksheets to see if there is any further adjustment required.

S

SAHM1Author

Thank you

X

xmasbaby0

Employee

You are a bit confused about claiming your children. You lose the child tax credit in the tax year that they turn 17, but you can still claim them as dependents until the tax year they turn 19 or even until they turn 24 if they are full-time students. You would continue to get the $500 credit for other dependents instead of the child tax credit, and by claiming them as dependents you could also be eligible for education credits if they are in college.

CREDIT FOR OTHER DEPENDENTS

https://ttlc.intuit.com/questions/4499708-what-is-the-500-credit-for-other-dependents-family-tax-credit

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**