Author Topic: W4 Help  (Read 2527 times)

dcozad999

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W4 Help
« on: October 13, 2015, 11:06:32 AM »
I'm not sure if I am just filling out the information in the online calculators or what, but they are giving me odd results. One calculator said I should claim 0 and have extra withheld? I'm thoroughly confused.

My wife just began working this summer and I would like both of us to claim the correct amount of exemptions to where we don't owe any extra at tax time, but we also don't get a giant refund. We'd like to come in as even as possible.

Together we will gross about $120,000 (me $80k, her $40k)
We have one son with childcare expenses of around $5k

Assuming we file jointly and take the standard deduction, what would you guys recommend each of us claim on the w4?



Zaga

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Re: W4 Help
« Reply #1 on: October 13, 2015, 11:18:34 AM »
I use my own calculator, not the ones online, then back into what to claim on my W-4.  Have you tried that?

Here's how I do mine:
Gross income, minus the standard deduction and personal exemptions, then minus all of my pre-tax deductions (medical, 401-K, student loans etc).  This has to be customized to your household of course.  You'd have to add in child care expenses and the child tax credit if you get it.

This gives you taxable income.  You can figure out how much your taxes will be from this using the tax tables or some quick bracket calculations.

Once you know your total federal tax bill, split it up between your paychecks in whatever way works best for you and use that to figure out what you should claim on each W-4.

So, as an example, say you calculate that you'll owe about $9,000 in federal taxes, you could get $3,000 of that from your wife's checks, which would be $250 a month and $6,000 from you which would be $500 a month.  Once you get your withholding just a bit above those (I prefer to get around a $500 refund in case my calculations are a bit off) amounts then you'll be all set.

Does any of that make sense?

dcozad999

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Re: W4 Help
« Reply #2 on: October 13, 2015, 11:51:41 AM »
I think so.

I will give it a try when our HR system is back up and I can check the pay stubs.

You'd think they could make it a lot easier than this.

Zaga

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Re: W4 Help
« Reply #3 on: October 13, 2015, 12:24:25 PM »
I think so.

I will give it a try when our HR system is back up and I can check the pay stubs.

You'd think they could make it a lot easier than this.
Lol, you want Congress to make your taxes easy?  Yeah, right!

FiguringItOut

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Re: W4 Help
« Reply #4 on: October 13, 2015, 02:37:25 PM »
I use my own calculator, not the ones online, then back into what to claim on my W-4.  Have you tried that?

Here's how I do mine:
Gross income, minus the standard deduction and personal exemptions, then minus all of my pre-tax deductions (medical, 401-K, student loans etc).  This has to be customized to your household of course.  You'd have to add in child care expenses and the child tax credit if you get it.

This gives you taxable income.  You can figure out how much your taxes will be from this using the tax tables or some quick bracket calculations.

Once you know your total federal tax bill, split it up between your paychecks in whatever way works best for you and use that to figure out what you should claim on each W-4.

So, as an example, say you calculate that you'll owe about $9,000 in federal taxes, you could get $3,000 of that from your wife's checks, which would be $250 a month and $6,000 from you which would be $500 a month.  Once you get your withholding just a bit above those (I prefer to get around a $500 refund in case my calculations are a bit off) amounts then you'll be all set.

Does any of that make sense?

Zaga, your logic makes perfect sense to me.  But how do you go from $500 per month to the correct number of W-4 withholdings?  I can figure out my total tax liability, but how do I translate it into W-4 language?  Thanks.

Zaga

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Re: W4 Help
« Reply #5 on: October 13, 2015, 03:33:58 PM »
Well there's the only place where I use the online paycheck calculator.  I use paycheck-city, and it's gotten me within $1 of my withholding as long as I know all of my other info.

If that doesn't work, remember that you are allowed to change your W-4 at any time.  So if you're off at first, change it!

maco

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Re: W4 Help
« Reply #6 on: October 13, 2015, 04:10:47 PM »
I think so.

I will give it a try when our HR system is back up and I can check the pay stubs.

You'd think they could make it a lot easier than this.
Lol, you want Congress to make your taxes easy?  Yeah, right!
From what I understand, H&R Block and TurboTax lobby heavily against simplifying the tax code. It'd put them out of business if we could do our taxes ourselves.

Zaga

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Re: W4 Help
« Reply #7 on: October 13, 2015, 04:43:57 PM »
Yeah, I knew that and it makes me sad.  I can only hope that sanity starts winning out, but I'm certainly not going to hold my breath.