Confused about personal allowances on W4, should it be 1 or 2

[vikasintl]

Washington.
My spouse lost his job and now he is getting unemployment benefits which is considered as an income for tax purposes.
I am confused what should be my personal allowances on w4 ?
should I have a personal allowances for my spouse on my w4?

On IRS worksheet it asks me to choose one if either of the following applies.
1.You are married, have only one job, and your spouse does not work; or B
2. Your wages from a second job or your spouse’s wages (or the total of both) are $1,500 or less

If my spouse is getting unemployment benefits does it considered as if he is working?
also on 2nd line it says spouse wage should be $1500 or less...this $1500 is annual figure or monthly?

also on the same worksheet on the 3rd line says enter 1 for your spouse but you can choose to enter 0 if you have a working spouse (again getting unemployment check is considered work?)What is the name of your state (only U.S. law)?

 

[commentator]

The more exemptions you claim on your W-4 now, the less they will take out of your check now for income taxes, and then you may owe taxes at the end of the year. Or you will get very little back.

Some states allow one to take 10% out of unemployment benefits each week so they will have some income tax paid in already. In any case, you should not make plans as though your spouse is going to be on unemployment forever. But you may need the money now, and wish to worry about the years tax liabilities next year at tax time when hopefully your spouse will be back at work. Increased # of exemptions now = more money in your check now, less already paid in toward your 2010 income taxes.
Less exemptions now = less coming to you now in your paychecks now, less owed at tax time.

Unemployment is quite a bit less than a person is making at even a very low paying job. Most people get another job as soon as they can.

But unless your income is incredibly high, how many exemptions to claim is very much a choice, not something you have to have exactly right according to some formula.

 

[LdiJ]

I very much dislike the worksheets on the W4. I believe that often they cause people to underwithhold.

I recommend that someone never claim more exemptions than the number of members of their family, and in the case of a spouse receiving unemployment, where inadequate taxes may be withheld, I recommend that the other spouse claim zero exemptions.