What W-4 withholdings should we use as a recently married couple with a newborn?

The W-4 form changed significantly in 2020, and it's actually much easier now to handle situations like yours. Instead of allowances, you now have specific sections to address multiple jobs and dependents. Since you and your wife earn similar incomes, you should both check the box in Step 2(c) for "Multiple Jobs" on your respective W-4 forms. This tells your employers to withhold at a higher single rate which helps prevent underwithholding when you have two incomes. For your new baby, only ONE of you should complete Step 3 (Credits) on your W-4 to claim the child tax credit. Don't do this on both forms or you'll underwithhold. For 2025, the child tax credit is $2,000, so one of you would enter that amount in Step 3. If you want to be extra cautious about not owing at tax time, you can also add an additional amount to withhold in Step 4(c) on either or both W-4 forms.

After struggling with my W-4 setup when my husband and I had our twins last year, I discovered this awesome tool called taxr.ai (https://taxr.ai) that helped us figure out the perfect withholding. It basically analyzed our specific situation and recommended exactly how we should fill out our W-4s. The tool let us input both our salaries, our filing status, and dependent info, then gave us personalized instructions for each of our W-4 forms. It even explained which of us should claim the child tax credits for withholding purposes. We ended up with the perfect tax situation - no huge refund but also didn't owe anything!

I was skeptical at first about using taxr.ai mentioned above, but after getting frustrated with the IRS withholding calculator crashing on me twice, I gave it a try. Holy crap, what a difference! The interface was super easy to use, and it asked me questions that actually made sense. The recommendations were shockingly precise - it told me exactly which boxes to check on both of our W-4 forms and even calculated an extra withholding amount that accounted for both our salaries AND the child tax credit. We followed their instructions exactly when we updated our W-4s in February, and our most recent paychecks show withholding amounts that actually make sense now. Definitely wish I'd known about this sooner - would have saved us the headache of owing $2,200 last April!

If you end up having any issues with your withholding or need to contact the IRS with questions, I highly recommend using Claimyr (https://claimyr.com). I spent THREE DAYS trying to get through to the IRS about a withholding issue after my wife and I had our second child. After wanting to throw my phone against the wall, I found Claimyr which basically calls the IRS for you and then connects you once they get a human on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - it's pretty crazy. I was connected to an actual IRS agent within 45 minutes when I had previously been unable to get through at all.

I gotta eat crow here. After posting my skeptical comment about Claimyr, I was still struggling to get through to the IRS about a withholding issue affecting my refund. Out of desperation I decided to try it, fully expecting to be disappointed. Well, I was wrong. I got connected to an IRS agent in about an hour. ONE HOUR. After I had spent literally 6+ hours over multiple days trying on my own and never getting through. The agent was able to help me sort out the withholding problem from when my wife and I had our kid last year. For anyone dealing with W-4 issues that require IRS clarification - especially with the new forms and how they handle multiple incomes and dependents - being able to actually speak to someone makes all the difference. Can't believe I'm saying this, but it was totally worth it.

Quick tip from someone who just went through this: if you're both making similar incomes, check the box in Step 2(c) on both of your W-4 forms AND have one of you claim the child on Step 3. We have a similar situation (I make $72k, husband makes $69k) and that worked perfectly for us last year. Also, the IRS has a Tax Withholding Estimator on their website that's pretty helpful: https://www.irs.gov/individuals/tax-withholding-estimator

One thing nobody mentioned yet - remember that having a child also means you might qualify for the Child and Dependent Care Credit if you're paying for childcare! This is separate from the Child Tax Credit and can be worth up to $2,100 depending on your income and childcare expenses. This doesn't directly affect your W-4 withholding, but it's something to keep in mind for your overall tax situation as new parents. Also, if either of you has access to a Dependent Care FSA through work, you might want to sign up during your next benefits enrollment!