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Federal Withholdings Question
Posted on 2/11/19 at 2:06 pm
Posted on 2/11/19 at 2:06 pm
So I received a fairly substantial raise at the beginning of the year and I took a look at the IRS Withholdings Calculator to make sure my wife and I didn't need to update our W-4s.
After looking at it, it seems like we will be overpaying a little over $2,500. In order to even out our withholdings to our tax liability it says to update line 6 of our W-4s with $26 (me) and and $23 (her).
My questions is should I change them to the recommended amount on the calculator or should I still leave some cushion ($3-$5 less than the recommended amount) as to avoid having to write a check during tax season next year.
We are both in our mid-20s so the additional income per month is always welcome, but it will physically pain me to write an additional check to Uncle Sam come tax time. Any help is appreciated.
After looking at it, it seems like we will be overpaying a little over $2,500. In order to even out our withholdings to our tax liability it says to update line 6 of our W-4s with $26 (me) and and $23 (her).
My questions is should I change them to the recommended amount on the calculator or should I still leave some cushion ($3-$5 less than the recommended amount) as to avoid having to write a check during tax season next year.
We are both in our mid-20s so the additional income per month is always welcome, but it will physically pain me to write an additional check to Uncle Sam come tax time. Any help is appreciated.
Posted on 2/11/19 at 2:27 pm to Drunken Crawfish
Have you done your taxes for last year yet?
If so, AND you expect the only change to be your raise in salary, use your taxes this year as a baseline. Should be pretty straightforward. To keep it simple just multiply the extra income by your marginal tax rate and spread that out over the course of the year.
Now if you have a bunch of other changes that happen this year then the above won't work, so if your fear is to write a check next year then withold an extra amount per paycheck.
If so, AND you expect the only change to be your raise in salary, use your taxes this year as a baseline. Should be pretty straightforward. To keep it simple just multiply the extra income by your marginal tax rate and spread that out over the course of the year.
Now if you have a bunch of other changes that happen this year then the above won't work, so if your fear is to write a check next year then withold an extra amount per paycheck.
Posted on 2/11/19 at 2:46 pm to castorinho
quote:
Have you done your taxes for last year yet?
We have not. There is a chance that the wife will receive a 5%-7% raise as well as she took on some new duties. They have their performance reviews in April. She may get a bonus (~$3k-5k) as well.
No other changes besides that. Were trying to keep dependents at zero for a few more years.
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