Reply To: Time to change W-4 withholdings?

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    Anonymous

      IRS Withholding Calculator

       
      If you are an employee, the Withholding Calculator can help you determine whether you need to give your employer a new  Form W-4, Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.

      Who Can Benefit From The Withholding Calculator?

      Employees who would like to change their withholding to reduce their tax refund or their balance due;
      Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
      Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.
      CAUTION:    If you will be subject to alternative minimum tax, self-employment tax, or other taxes; you will probably achieve more accurate withholding by following the instructions in Publication 919, How Do I Adjust My Tax Withholding?

      Tips For Using This Program

      Have your most recent pay stubs handy.
      Have your most recent income tax return handy.
      Estimate values if necessary, remembering that the results can only be as accurate as the input you provide.
      To Change Your Withholding:

      Use your results from this calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate.
      Submit the completed Form to your employer.
       

      Continue to the Withholding Calculator: http://www.irs.gov/individuals/page/0,,id=14806,00.html

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    Anonymous

      Because of my particular circumstances, it was advantageous a few years ago for me to examine my withholdings from each paycheck. After tax deductions and credits each year, I typically have a very low tax liability that results in a sizable refund. By adjusting my W-4 on file with employer to better reflect what I expect to file at the end of year, I was able to reduce the federal taxes withheld from each paycheck (more $ throughout the year) and still receive my sizable refund at the end of year. This made a huge difference or me! Look into this and see if it’s appropriate for you situation, but just keep in mind if your income bracket or tax deductions changes throughout the year for whatever reason, you need to reexamine things so that you don’t end up owing. budget budget pla plan plan…. ;). Than you big sister (she worked in my payroll office) for teaching me this 10 years ago!

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