W4 allowances: may need adjusting

[Mongoose]

DH and I are currently overpaying taxes, perhaps badly I think.  We have our W4 allowances set to zero at both jobs. Family of 4 (two of us plus two kids)...no child care expenses as we work opposite shifts.

Is there a good way to determine how to adjust the W4 allowances to get more take home without creaming ourselves next April?  Our first jobs we put two allowances on each of our W4s and got a large (for our incomes) tax bill.  I would like to avoid a repeat.  Money is tight right now so we'd like more take home and to give the feds a (smaller?) interest free loan.

My job (6 month contract ending June 30...so one more paycheck. W4 can't be adjusted). Paid monthly.

Husband (W4 can be adjusted. His pay recently increased a bit so current paycheck is more than he was making before by at least $100.) Paid weekly. Paycheck varies by up to $100/week.

Does the W4 allowances number affect FICA, Medicare and/or state withholdings as well? If I could drop the Federal to around $29 per paycheck we'd come out somewhere close to $500 per week (sadly a huge improvement for us currently).

[MDM]

See the following.  At least one of them should be helpful. ;)
http://forum.mrmoneymustache.com/taxes/best-way-to-calculate-w-4-exemptions-for-2016/
http://forum.mrmoneymustache.com/taxes/would-you-rather-owe-or-get-a-refund/
http://forum.mrmoneymustache.com/taxes/am-i-witholding-too-much/
http://forum.mrmoneymustache.com/taxes/best-paycheckwithholding-calculator(s)/
http://forum.mrmoneymustache.com/ask-a-mustachian/turbo-tax-vs-cpa/

If those don't help, let us know.

[Mongoose]

Thanks. The calculator helps a bit. I didn't see any information on whether the FICA or state withholdings would change? I would like to leave the state withholdings the same but change the federal. Perhaps that isn't possible. But, we'll try it and see what happens.

[braje]

A new W-4 will change the amount of Federal income tax withheld you would need to fill out the State equivalent to change State tax.  And no neither with charge the FICA amounts

[fattest_foot]

Someone needs to do a "saver's w-4 calculator."

I went and calculated what I think our taxes will be for the year (I was able to estimate to within $10 I think last year), and it looks like we'll be getting $5000 between federal and state. My wife and I both have 0 exemptions, too.

With the calculators I've seen, it seems like no one wants to allow you to enter things like non-taxable (healthcare) income and 401k/IRA contributions. On top of that, standard deductions/exemptions seem to be ignored as well. So while we're very fortunate to be earning six figures gross, our actual AGI is less than half of that.

[MDM]

Someone needs to do a "saver's w-4 calculator."

If you can get your tax bill that close, you can probably "use the Payroll tab to calculate the exemption allowances needed on a W-4" as discussed in http://forum.mrmoneymustache.com/ask-a-mustachian/turbo-tax-vs-cpa/msg539186/#msg539186.

[mousebandit]

I just did this using the cash flow spreadsheet in the taxes subforum (in the first sticky post) and used it to estimate 2016 AGI.  Then I plugged that number into the IRS withholdings calculator.  We can switch to married with 18 allowances, LOL!  Methinks we were having them withhold too much, haha! 

MouseBandit

[MDM]

I just did this using the cash flow spreadsheet in the taxes subforum (in the first sticky post) and used it to estimate 2016 AGI.  Then I plugged that number into the IRS withholdings calculator.  We can switch to married with 18 allowances, LOL!  Methinks we were having them withhold too much, haha! 
MouseBandit

You would not be the first to have been giving Uncle Sam an interest-free loan - congratulations on taking more control of your money!

Under the "trust but verify" philosophy, check the next few paychecks to ensure your
1) W-4 changes get processed correctly (it might take payroll one or two cycles to implement them), and
2) Projected year-end withholding matches your expectations.

Good luck!