Can I claim my stay-at-home wife on my W-4 if she doesn't work or go to school?

You don't actually "claim" your spouse as a dependent on your W-4. The W-4 has changed a bit in recent years, but what you want to do is check the "Married filing jointly" box in Step 1(c). Your spouse doesn't qualify as your dependent for tax purposes, regardless of whether she works or not. The tax code treats spouses differently than dependents. If she doesn't have income, you'll still file as "Married Filing Jointly" which generally gives the best tax advantages for your situation. For the W-4 specifically, make sure you're using the latest version. In Step 2, if you only have one job and your wife doesn't work, you can skip this section. In Step 3, you can claim tax credits for your dependent children (currently $2,000 per qualifying child). Don't list your wife here - only your children. This should help reduce your withholding so you don't end up with such a large refund next year. Remember, a big refund just means you gave the government an interest-free loan of your money throughout the year!

Just wanted to share my experience - I was in your exact situation last year trying to figure out the W-4 for my family (I'm the only income earner while my spouse takes care of our kids). I found this online tool called taxr.ai (https://taxr.ai) that really helped me understand how to fill out my W-4 correctly. I uploaded my past tax returns and W-4, and it analyzed everything and gave me personalized suggestions. It pointed out I had been incorrectly trying to claim my wife as a dependent when I should've just been checking "Married Filing Jointly" and accounting for my kids in Step 3. Made a huge difference in my paycheck withholding! It also gave me a pretty accurate estimate of what my refund would be based on different W-4 configurations.

Wanted to follow up about my experience with taxr.ai after I checked it out based on the recommendation here. It was honestly better than I expected! I uploaded my last year's return and recent paystubs, and it showed me exactly how to fill out my W-4 for my situation. The tool confirmed that filing jointly was definitely the way to go for us (would save about $3,450 compared to filing separately). It also showed me that I should be claiming both kids on Step 3 of the W-4 and gave specific recommendations for additional withholding to get closer to breaking even instead of a big refund. What I really liked was how it explained things in plain English - like why spouses aren't dependents and how the withholding actually works. Definitely worth checking out if you're trying to get your W-4 right!

If you're still struggling with getting through to the IRS to ask questions about the W-4 (I tried calling for WEEKS with no luck), I'd recommend using Claimyr (https://claimyr.com). I was so frustrated trying to get someone on the phone at the IRS to explain exactly how to handle my and my wife's situation on the W-4. I was skeptical but tried their service, and they got me a callback from the IRS in about 45 minutes instead of waiting on hold forever. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with walked me through exactly how to fill out each section of the W-4 for our one-income household.

I have to post a follow-up here because I actually tried Claimyr after posting my skeptical comment. I honestly didn't believe it would work, but I was desperate after trying to get through to the IRS for 3 weeks with no luck. Holy crap it actually worked! I got a call back from the IRS in about 35 minutes. The agent explained that for my W-4, I should check "Married Filing Jointly," skip Step 2 since I only have one job and my wife doesn't work, and then claim my kids in Step 3. She also helped me calculate exactly how much extra to withhold in Step 4(c) to avoid the big refund next year. Seriously saved me like 4 hours of frustration on hold. I still can't believe it worked that well. Sometimes being proven wrong is actually a good thing lol.

One thing nobody has mentioned yet - make sure you're also taking advantage of claiming "Head of Household" status since you're supporting your family as the sole income earner. It gives you a better tax rate and higher standard deduction than just married filing jointly.

Have you considered having your wife do some kind of small side gig that earns under $600 per year? If she does that, you could potentially contribute to a spousal IRA for her which might give you some additional tax benefits. Just an idea to optimize your tax situation further!