Baby coming - Question about taxes and witholding

[RobEvans]

My wife is going to stop working soon, as our first baby is due in September.

 

First, is this correct : I will get a $1000 child tax credit for this baby, plus $3800 will be deducted from my taxable income due to having a dependent (marginal rate 15%.) Therefore I can expect that this year's and the next 17 years' taxes will be reduced by 1000+ .15(3800) = $1570

 

Second, if I have the first one right, how many withholding allowances should I be claiming to my employer? Currently I have two - should I make that three? Or more? My goal is to have zero tax return and zero owed at the end of the year.

[bjk123]

You best bet is going to be to take your numbers over to the withholding calculator here:

http://www.irs.gov/individuals/article/0,,id=96196,00.html

[groze]

If your income is low enough, you might be able to claim Earned Income Credit as well.