How many allowances should I claim on my W4 form with 3 kids and non-working spouse?

So if there are no more allowances, how do I make sure I'm not getting too much withheld? With the old system it was easy to understand that more allowances = less withholding. Is there some formula to figure out the equivalent on the new form?

The new system is actually more straightforward once you get used to it. Instead of the abstract "allowances" concept, you directly enter dollar amounts. To reduce withholding (equivalent to more allowances), you can add deductions in Step 4b. A rough estimate is that each $4,300 in deductions is similar to an additional "allowance" in the old system. So if you want the equivalent of 4 allowances, and the standard parts of the form already give you the equivalent of 3 (your filing status plus child credits), you could add about $4,300 in Step 4b. But remember, this is just a very rough conversion - the new system is designed to be more accurate when you enter your actual expected deductions.

Does it work for more complicated situations? I have a side business and rental property income on top of my regular job. The W4 calculator on the IRS site always seems to be way off for me.

I'm skeptical about using some random AI for tax advice. How do you know it's giving accurate information? The IRS changes rules all the time and I'd be worried about getting bad advice.

It absolutely works for complex situations! The system is built to handle multiple income streams and will guide you through accounting for side business and rental income on your W4. It's much more intuitive than the IRS calculator and gives specific instructions for your situation. As for accuracy concerns, I completely understand being cautious. What impressed me was that the tool references specific IRS publications and tax code sections when explaining its recommendations. It's regularly updated with the latest tax rules, and you can even ask it to explain how it arrived at specific numbers. I've double-checked some of its recommendations with tax publications and found it to be spot-on.

Wait, so what does this service actually do? Does it just call the IRS for you? I don't understand how that would help me get through faster than calling myself.

Sounds like a scam to me. There's no way to "skip the line" with the IRS. And who knows what info you're giving to this random company. I'll stick with waiting on hold for 3 hours like everyone else.

It doesn't call the IRS for you - it uses a technology that monitors the IRS phone lines and connects you when there's an opening. Basically, it waits on hold so you don't have to. You get a call back when an agent is available. Regarding your concern about it being a scam, I totally get it. I was suspicious too. But they don't ask for any sensitive information - you just provide your phone number so they can call you back when they get through to the IRS. Once you're connected, you're talking directly to the IRS, not through any intermediary. I researched them before using the service and they have legit reviews and a solid reputation.

I tried that estimator and it kept giving me weird results. It told me to put like $500 in extra withholding every paycheck which seemed way too high. Did anyone else have problems with it?

The estimator can give strange results if you're not entering your information consistently. A common mistake is entering year-to-date income information that doesn't align with the pay frequency you selected. If it's telling you to withhold an extra $500 per paycheck, double-check that you're entering your annual salary correctly and that you've selected the right pay frequency (bi-weekly, monthly, etc.). Also make sure you're entering your YTD withholding correctly from your paystub. The estimator is actually quite accurate when the inputs are correct, but it's very sensitive to inconsistent information.

Do you actually have to submit a new W4 form every time you want to make changes? Seems like a hassle to keep bothering HR.

Yes, you do need to submit a new W4 form each time you want to make changes. Most HR departments are used to this though - it's pretty common for people to adjust their withholding throughout the year as their circumstances change. You can usually just email or drop off the new form, and most payroll systems can implement the changes for the next pay period. It's really not as much of a hassle as it seems, and it's worth it to avoid big surprises at tax time!

This is really helpful! I like the approach of starting conservatively and adjusting later. One question though - how do I know if my mortgage interest plus other deductions will actually exceed the standard deduction? Is there an easy way to estimate this without doing a full tax calculation? I don't want to put too much in 4b and end up owing a lot more than I'm comfortable with.

Great question! Here's a quick way to estimate if you'll exceed the standard deduction: Your mortgage interest is probably around $12,000-15,000 annually based on your payment amount. Add your state and local taxes (property taxes plus state income tax, capped at $10,000 total). If you have significant charitable donations, add those too. For most people with a $1,350 mortgage payment, you're looking at roughly $20,000-25,000 in potential itemized deductions. Since the standard deduction for married filing jointly is $27,700 in 2024, you might not actually benefit from itemizing unless you have substantial charitable giving or other deductions. My suggestion: Start by just filling out Steps 1-3 normally without adding anything to Step 4b. See how your first few paychecks look, then use the IRS withholding calculator mid-year to fine-tune. This way you avoid the risk of under-withholding while you figure out your actual deduction situation.

This is exactly the kind of step-by-step guidance I was hoping to find! I really appreciate you breaking down the mortgage interest calculation - I had no idea that with the higher standard deduction, I might not even benefit from itemizing despite having a mortgage. Your approach of starting with just Steps 1-3 makes so much sense. I was getting overwhelmed trying to figure out all the deductions upfront when the child tax credits alone will probably get me close to where I want to be. I think I'll follow your advice and fill out the basic form first, then check my paychecks after a month or two to see if I need to make adjustments. One follow-up question - when you say "see how your paychecks look," what should I be comparing them to? Should I be looking at how much federal tax is being withheld compared to my previous W4, or is there a better way to gauge if I'm on track?