Are our W4s set up right for a family with two kids?

Your W4 settings are really important for getting your withholding right, especially with commission income in the mix. Here's what I'd suggest: For a married couple with two qualifying dependents, you have a few options. The simplest approach would be to have the higher earner (your wife) claim both children on her W4. This is often the most straightforward for families. Since her income is more stable without the commission variable, it might make withholding calculations more predictable. For your situation with commission income, you might want to use the IRS Tax Withholding Estimator tool online. It lets you input both your salaries plus estimated commission, and will give you specific instructions for both W4 forms. Consider also using the "extra withholding" line on your W4 if your commission makes your income unpredictable. You can have a set additional amount withheld each paycheck to cover the taxes on your commission income.

I was in a similar situation with my spouse having variable income and me having steady pay. I tried different W4 setups for years and kept getting surprise tax bills until I discovered taxr.ai (https://taxr.ai). Their withholding calculator is amazing for commission-based incomes! I uploaded our previous year's tax documents and it analyzed our withholding patterns alongside the commission fluctuations. It gave us exact instructions for filling out each W4 form, including additional withholding amounts that adjusted based on commission patterns. Super helpful when one spouse has variable pay!

Just wanted to follow up about taxr.ai - I checked it out and wow, it was exactly what we needed! My husband has quarterly bonuses that always messed up our withholding, but the personalized W4 instructions from taxr.ai fixed our issue. It showed us how to handle the multiple income streams and kid tax credits properly. The coolest part was seeing how it adjusted the calculations specifically for our situation. We're actually having the right amount withheld for the first time in years. No more surprise tax bills or giant refunds!

If you're trying to get your W4s perfect but still have questions after trying online tools, I'd suggest calling the IRS directly. They can walk you through specific scenarios for your family situation. BUT... good luck actually reaching a human at the IRS! I spent 3 hours on hold last month before giving up. Then I found https://claimyr.com through a colleague. They have this service where they wait on hold with the IRS for you and call you when an agent is on the line! I was skeptical but you can see how it works here: https://youtu.be/_kiP6q8DX5c I used it to get personalized W4 guidance for my family's complicated situation (multiple jobs, rental income, kids). Within 2 hours, I was talking to an actual IRS representative who explained exactly how to fill out our forms. Saved me hours of frustration!

I have to eat my words from earlier. After struggling to get answers about our W4 situation for weeks, I broke down and tried Claimyr. In less than an hour, I was talking to an actual IRS representative who walked me through exactly how to handle our W4s with my wife's variable commission income. The IRS agent explained that we should use the multiple jobs worksheet and gave me specific guidance for our two-income household with kids. Saved me at least 3-4 hours of hold time and probably a surprise tax bill next year. Sometimes you have to admit when you're wrong, and I was definitely wrong about this service!

Don't overthink this. The new W4 forms don't have allowances anymore, so it's pretty straightforward. Just check the box for married filing jointly, check the box in Step 2 if both of you work, and list your kids in Step 3. That's it.

Has anyone tried the two-earner worksheet on the W4? My partner and I tried using it last year and still ended up owing about $2k at tax time. So frustrating!

The commission income definitely adds complexity to your W4 setup! Here's what's worked for me in a similar situation: Since your wife has the higher, more stable income at $78k, I'd recommend having her claim both kids on her W4 in Step 3. This keeps things simpler and more predictable for withholding calculations. For your commission income, here's the key: estimate your total annual commission and divide by your number of paychecks, then use that amount in the IRS withholding calculator. The calculator will tell you exactly how much extra to withhold on line 4(c) of your W4. One trick that's helped me - I actually slightly overestimate my commission income when doing these calculations. Better to get a small refund than owe money! You can always adjust mid-year if your commission patterns change significantly. Also, since commission income can push you into higher tax brackets unexpectedly, consider having a flat extra amount withheld from each of your paychecks (like $100-200) just as a buffer. This has saved me from surprise tax bills multiple times. The bottom line: use the IRS withholding calculator quarterly to stay on track, especially with variable income in the mix.

One thing I haven't seen mentioned yet is the timing of when you update your W4s during the year. Since you have commission income that varies, I'd suggest reviewing your withholding after each quarter, especially if you have a particularly high or low commission quarter. Also, with two kids, make sure you're taking advantage of the Child Tax Credit properly. The current credit is $2,000 per qualifying child, and this gets factored into your withholding calculations when you claim them in Step 3 of the W4. A tip from my own experience with variable income: I keep a simple spreadsheet tracking my year-to-date commission versus what I estimated when I last updated my W4. If I'm running significantly higher or lower than projected by mid-year, I'll run the IRS calculator again and adjust my withholding for the remaining months. The key is staying proactive rather than waiting until tax time to discover you're off target. With your combined income levels and two kids, you're probably in a sweet spot where small adjustments can make a big difference in getting your withholding just right.