I find your narrative a little confusing and very misleading.
For a married couple, with regards to W4 withholding status, to get the most refund at the end of the year, claim (on the w4) withholding at S-0; to receive the least (or even to have to pay for not withholding enough) claim (on the w4) withholding of M-any number above 0.
The W4 is filled out prior to the end of the year for that year. It tells the employer (paying establishment) what YOU DESIRE WITHHELD during the year.
Your filing of income taxes and amount of total taxes you should be liable for are determined at the end of the year - when you file your income tax return.
How much tax liability you have is NOT determined by the W4.
How much of a refund you have relies upon:
YOU OWE a TAX LIABILITY based upon your income and various deductions.
YOU SET ASIDE monies for this burden each month throughout the year.
Your TAX LIABILITY less Your SET ASIDE = what will be REFUNDed to you.
YOU decided how much money to set aside each month when you filled out your W4.
Again:
IF you want to ensure you can get a maximum refund always use S0.
IF you want to chance it and get more take-home pay each month and still have enough withheld each month use a withholding rate of S-1,2,3,4 etc or M-0,1,2,3,4 etc.
Just for info:
M-0 withholds much less than S-0 because the logic is that the Married situation is needy of more money during the month to take care of responsibilities AND will get substantially more tax breaks applied at the end of the year. The more tax breaks, the lesser your tax liability.
The numbers should be standing for how many dependents you have and will be claiming at the end of the year. They do mean something. If you have 5 children and a wife you could LEGALLY have your W4 withhold M-7 (the 5 children, the wife, and yourself). If you only have a wife and really want to get most if not all of your money (as opposed to having federal tax withheld) and think claiming on your W4 M-4 would be a good idea - WRONG!
IF you fail to withhold sufficient monies each month and it happens that your failure was due to you claiming too many dependents on your W4, the government will not be happy. They could, and probably would fine you, AND the IRS could make you pay quarterly taxes next year (rather than just filing once per year) with sufficient amounts so that you would not again owe taxes at the end of the year.
Bottom line:
The W4 is the tool for you to have Federal Income Tax funds withheld from every paycheck.
Never claim more (the number after the S- or M-) than the dependents you legally can claim at the yearend.
If you do not make tons of money, and if you can (financially afford to), always claim 0 as your number and try to claim withholding as S (as opposed to M) to ensure you have a decent refund (monies over withheld compared to your Tax liability) coming at the end of the year Income Tax Refund time.
[doublepost=1549496968][/doublepost]If you don't care to read all that:
If you do not make a bunch of money and do NOT have lots of investments, the best option to receive the biggest Refund Check at the beginning of next year
CLAIM on your W4 S-0