I'm trying to minimize my tax withholding, but at the same time not to claim more than a correct number of exemptions.

I got stuck with my wife's situation. She's a full-time PhD student and technically doesn't work at all, thus it makes sense to claim following allowances:

  • 1 for myself
  • 1 since I'm married, have only one job and my wife does not work
  • 1 for my spouse

But at the same time my wife receives stipend (scholarship) from her college, so she's making some money and by following this logic I need to claim next allowances:

  • 1 for myself

Could anybody shed some light on which interpretation of my situation is a correct one?

Thanks in advance!

1 Answer 1


If your spouse has taxes taken out of her stipend, and claims herself as an exemption on her W-4, then you should not include her as an exemption on your W-4, or you risk having too much tax withheld and will get a large refund when you file. Getting a refund is not necessarily bad, but it's basically an interest-free loan to the Treasury - you might be better off using that cash throughout the year to pay off debt, invest in a retirement plan, etc.

If she does NOT get any taxes taken out, then you probably need to keep your exemptions as low as possible to make sure you have enough tax taken out. If you owe too much tax when you file, you might owe penalties and interest on top of your tax bill.

W-4s are not an exact science - the best way to make sure you have the right withholdings is to extrapolate your paychecks for the entire ear, estimate your tax bill using an online tax calculator or spreadsheet, and see if you are taking too much or too little out of your paycheck.

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