Having a baby is one of the most exciting times in life, and there are many things to prepare when you enter in this new phase. While you may have diapers, cribs, and strollers on the top of your mind, it’s important to remember that being prepared from a tax perspective is just as important. So, how can you use PaycheckCity to prepare for your new bundle of joy? We’ll explain in this article.
From a tax perspective, having a baby means you can “1” as a dependent. This is essentially giving yourself a raise – congratulations! Why? Because when you claim additional dependents, less federal tax will be withheld every paycheck. This doesn’t mean you should add dependents if you don’t have them. If you need help filling out your Form W-4 use this tool or take a look at this article. Billy Long, Symmetry Software & PaycheckCity Developer who just welcomed a baby into his family, says, “It’s also important to note that you can change your withholding status any time in the calendar year your baby is due. For example, if you know your baby is due in October, you can change your withholding status in June, if you wish.
How PaycheckCity Can Help:
A raise sounds great, but how can PaycheckCity help me? We can help in a few ways:
- Help you fill out your new W-4
- Help you compare what your check will be before and after you change your dependents
- Be there for your first step in budgeting – we’ll help you determine what your paycheck is so you can set a realistic budget for your growing family.
These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.