Author Topic: Federal Withholding (getting married late in the year)  (Read 4748 times)

mikedom

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Federal Withholding (getting married late in the year)
« on: March 31, 2014, 10:52:51 AM »
Hi,

My fiancee and I will be getting married in September of this year and therefore will be filing jointly for 2014. I've estimated our tax liability for the year and it makes sense for us to submit new W-4s now (married, 2 allowances each) to pay the correct amount of taxes for the year. Last year we each filed as single and because of our disparate incomes, filing jointly will drastically reduce our liability.

Are there any issues with updating our withholding to married now even though we will not be married until September? If we wait until September we will grossly over pay and it wouldn't leave enough time in the year to not get a large refund, even if we reduce the withholding as much as possible.

Thanks!

simonsez

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Re: Federal Withholding (getting married late in the year)
« Reply #1 on: March 31, 2014, 11:21:21 AM »
What's the difference in updating your withholding to 'married' now compared to increasing the number of exemptions now as a single person?  Won't the latter do the same thing without having to worry about filing status (even if you are going to file jointly)?  e.g. add an exemption or 2 to each of your W-4's now as a single person and then adjust to what you were going to later this year when you actually are married.  I guess it depends on how easy it is to change your W-4's (1 change now vs. at least 2 changes).  I/we can change mine/ours in about 30 seconds as often as I/we want to.

Congrats and good luck!

Frankies Girl

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Re: Federal Withholding (getting married late in the year)
« Reply #2 on: March 31, 2014, 11:43:18 AM »
You're not officially married until September, so don't change your forms to say that until then. I'm pretty sure that's not allowed, and you'd technically be lying on a government tax form. Don't borrow trouble. ;)

Otherwise, it's easy to change the withholdings at any time - just talk to your HR department. I've got access to do it myself through my company's payroll management software, but even if our companies require you both to fill out a form, it takes like 5 minutes to print it out, fill it in and drop it with your HR person.



Cromacster

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Re: Federal Withholding (getting married late in the year)
« Reply #3 on: March 31, 2014, 11:56:39 AM »
Just wait to you are married and then calculate your withholdings to come out even at the end of the year.  So instead of 2, do like 10 (or whatever it may be).  Just be sure to change it back come the new year.

MDM

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Re: Federal Withholding (getting married late in the year)
« Reply #4 on: March 31, 2014, 02:38:35 PM »
First, congratulations and best wishes for the upcoming marriage.

Yes to all who have suggested the "single with higher allowances" path, for all the reasons they have given.

See http://www.irs.gov/Individuals/Withholding-Compliance-Questions-&-Answers for a little more info.

One oh-by-the-way: the longer you wait during the year to rectify your withholding, the more sure you need to be about the timing in your company's payroll department for processing W-4s.  Just call and ask them what time window you have to hit to ensure the change occurs neither a month too early nor too late.


mikedom

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Re: Federal Withholding (getting married late in the year)
« Reply #5 on: March 31, 2014, 07:07:05 PM »
Thanks! I am probably going to move forward with increasing the allowances without changing to married status (I don't want to run afoul of the IRS and get a 'lock-in' letter delivered to my employer). I can update to married in September to reduce the refund.

Is there a maximum allowances you can set? It sounds like as long as you've contributed enough to meet your expected liability you shouldn't get in trouble.

kkbmustang

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Cromacster

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Re: Federal Withholding (getting married late in the year)
« Reply #7 on: April 01, 2014, 08:35:28 AM »
If you are so motivated you can read through the IRS withholding rules and make it into an Excel spreadsheet.  Combine this with your paycheck data, expected deductions, and income taxes it makes a nice tool that allows you play around with your deductions, witholdings, allowances, etc.. and see how it affects your taxes.

If you keep up with the changes to the tax code it is a useful tool for planning.

http://www.irs.gov/pub/irs-pdf/p15a.pdf

Update:  This will provide similar results to the withholding calculator provided by the IRS  (See Kkb above).  I just find this format to be more user friendly.  It also helps you learn how the IRS calculates the different rates and what not....if you are willing to put in the work upfront.
« Last Edit: April 01, 2014, 08:39:04 AM by Cromacster »

simonsez

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Re: Federal Withholding (getting married late in the year)
« Reply #8 on: April 01, 2014, 08:55:06 AM »
If you are so motivated you can read through the IRS withholding rules and make it into an Excel spreadsheet.  Combine this with your paycheck data, expected deductions, and income taxes it makes a nice tool that allows you play around with your deductions, witholdings, allowances, etc.. and see how it affects your taxes.

If you keep up with the changes to the tax code it is a useful tool for planning.

http://www.irs.gov/pub/irs-pdf/p15a.pdf

Update:  This will provide similar results to the withholding calculator provided by the IRS  (See Kkb above).  I just find this format to be more user friendly.  It also helps you learn how the IRS calculates the different rates and what not....if you are willing to put in the work upfront.
Yes, the Circular E guide and the supplement (which you posted) are very good materials to go through every now and then.

I like projecting out my S.S. retirement benefits (in theory) which you can do from the Circular E links.