Ok, I should know this by now, having worked for over 10 years, BUT how do you know what to put for withholding? My DH works, I am a SAHM mom, and we have 3 kids. I'm not sure what we put on his W4 but we could really use any extra money per month. I am nervous about owing taxes, although we always have gotten a refund. Please enlighten me!

Well, there is a withholding calculator on the irs.gov website. That might be a good place to start.

But here is what I do ...

I look up the tables on the internet (again, the irs.gov website) that small business employers use for calculating withholding. I figure out what our annual tax is then select the withholding class (single vs married, number of deductions) that most closely matches that amount per paycheck. For instance, if we owe $6000 a year in federal taxes and hubby gets paid twice a month (1st and 15th), then we need $250 a paycheck withheld from each paycheck. I simply look through the tables to find a withholding class that comes closest to that amount. Keep in mind, you can also chose a specific class (married, 4 dependants in your case) then ADD a specific additional amount to be withheld if needed.

As for owing ... I'd rather owe than get a refund (we usually write a check of about $200). In our case, we usually get a refund from one government and owe another but it comes out about even. So I file for the government where I'll get a refund as quickly as possible then when that check comes in, I mail the tax return and send a check to the government where I owe.

And keep two important points in mind ... you can file a withholding form for your state so you withhold at a different class than on the federal form; and you can modify your withholding for either federal or state governments mid-year. So around August of every year, I check to see how we're doing with our withholding. Your employer can't restrict you on the number of times you change your withholding so you can make corrections any time you want. I try to get as close as possible but like I said above, I err on the side of owing a few bucks.

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Thanks Cookie2! I went on the irs site and checked out their withholding calculator. I just need to gather a little more info to fill it in accurately. My DH started a new job in July and we realized we do need to change the withhoding for that. Great help!