How do so many get money back on their taxes?

[WagsWife]

We have way under the exemptions we are suppose to claim on my dh's paycheck. When we work the W4 form, it shows that we should have 9 exemptions. We claimed only 7 and still ended up owing. We filed on the standard deduction, no itemizing. We do not qualify for EIC either. We get one child tax credit only. What are we doing wrong? Is there another credit of some sort I am missing? I don't want to pay the big amount at H & R Block to have them look at my return to see if I did it right. I just can't afford that.

 

Any suggestions? TIA

 

If you only have one child qualifying for the child tax credit then I would say 7 exemptions is to much. The more exemptions you claim on your pay the more money you have in your paycheck...but that also means less money is being set aside to pay your taxes. When you lower the exemptions down they take more out of your pay, but you pay less at tax time...or you may get a refund for paying too much through the year. I am not a tax expert by any means, but *I would lower your exemptions down to around 4 if you can afford that in your pay. We have 5 in our family with I believe 9 exemptions. We did that because it gave us extra money in our pay so we could use it for some investments. The fact that we had 3 children gave us enough tax credit to make it so we still get a decent return (normally about $3000)...this year however, we got about $900 less. Those extra exemptions are starting to catch up to us as my husbands pay goes up. We use this money to pay for our school books so I want to make sure we do not get any surprises in the future, so my dh is going to lower our exemptions back down to around 6.

[Renee in NC]

I think it also depends on income. We don't have a large income and we have our withholdings at 15 and there is almost 0 federal taken out of DH's check, but we qualify 8 of our children for the tax credits. We end up getting a large check.

 

Same here (for past years) - we get $0 taken out and get roughly $4K back each year. LArge family + low income = Large Refund (of money we never paid in.)