Should the higher or lower earner claim child on W-4 for tax withholding?

This is a common mistake that leads to underwithholding! When both spouses claim the same child on their W-4s, you're essentially telling the IRS you have two children (when you only have one), which reduces the withholding from both paychecks too much. For your situation, usually it's better for the higher-earning spouse ($70K) to claim the child on their W-4. This is because the tax benefit gets applied to income in a higher tax bracket. The higher earner will see a larger reduction in withholding, which better reflects the actual tax benefit you'll receive when filing jointly. That said, the income difference between you two isn't enormous, so the impact won't be as dramatic as it would be if, say, one earned $150K and the other $45K. The most important thing is that only ONE of you claims the child.

I went through something similar last year! After getting a surprise tax bill, I used taxr.ai to analyze our tax situation and it pointed out this exact problem with our W-4s. I uploaded our pay stubs and tax returns to https://taxr.ai and it showed we were both claiming our kids, which was causing the underwithholding. The system recommended my wife (higher earner) claim the kids and showed exactly how much more would be withheld if we fixed it. Super helpful since I'm not great with tax details.

I was really skeptical about tax tools after getting burned by those free calculators, but I finally tried taxr.ai after reading about it here. It actually worked! I uploaded our documents and it immediately spotted that both my husband and I were claiming our daughter. The analysis showed we'd been underwithholding by about $215 per month. We followed their recommendation to have only my husband (higher earner) claim her, and our withholding is now much more accurate. Just checked our latest pay stubs and the numbers match what they predicted.

If you've tried fixing your W-4s but still need help with your current tax bill, I'd recommend Claimyr for getting through to the IRS quickly. I spent WEEKS trying to call the IRS about a payment plan after we owed unexpectedly, but could never get through. Then I used https://claimyr.com and they got me connected to an actual IRS agent in about 20 minutes. There's a demo of how it works at https://youtu.be/_kiP6q8DX5c if you're interested. It saved me so much frustration and I was able to set up a payment plan right away.

I have to eat my words. After posting my skeptical comment, I was still struggling with a tax bill and getting desperate. Decided to try Claimyr as a last resort, and I'm shocked to say it actually worked! I'd been trying to reach the IRS for almost a month about setting up a payment plan. Used their service yesterday afternoon and got connected to an IRS rep in about 25 minutes. Got my payment plan set up and even had them explain the W-4 withholding issue that started this whole mess. Definitely worth it just for the time saved and stress reduction.

Another option you might consider is adjusting the "extra withholding" section on your W-4s. My wife and I have similar incomes to yours, and we had the higher earner claim our kid PLUS we each have an additional $50 taken out of every paycheck. It's worked well for avoiding surprises at tax time. Just make sure you're not overwithholding too much - that's just giving the government an interest-free loan!

Anyone else think the W-4 system is totally broken? Why do we have to figure this out ourselves? The government already knows how much we should be paying!

This is exactly what happened to us a few years ago! We learned the hard way that claiming the same child on both W-4s is a recipe for underwithholding. Here's what we did to fix it: 1. We had the higher earner (in your case, the $70K spouse) claim the child on their W-4 2. The lower earner ($45K spouse) should file a new W-4 with "Single or Married Filing Separately" checked in Step 1, even though you're married - this increases withholding 3. Consider adding extra withholding on one or both W-4s to be safe The income difference between you two isn't huge, but the higher earner claiming the child will still result in slightly better withholding accuracy. Most importantly, get those new W-4s submitted ASAP since you're already behind on withholding for this year. Pro tip: After you make the changes, check your next few pay stubs to make sure the withholding increased appropriately. You should see a noticeable bump in federal tax withheld from the higher earner's paycheck.