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Near the end of last year, my paycheck stopped including Social Security Tax, causing my net pay to increase. I just learned that there is an annual threshold for contributions to FICA/SS

This caused me to get one amount per paycheck, and then another after that threshold was reached. I can change my federal filing status to contribute more or less money throughout the year, so I'm wondering if there is a schedule/formula I can use to change my withholdings to allow my paychecks to be as uniform as possible for budgeting reasons. Does anyone know how this can be calculated?

I know I would start by claiming many exemptions and then claiming less exemptions by the end of the year, but I'm not sure if my paycheck would consider my past tax contributions when I change the filing status and when to make the changes.

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    Since withholding is for income tax, and the threshold is for FICA/SS tax, what you want might not be possible. – RonJohn Feb 1 at 23:09
  • If you need it for budgeting, just calculate with the lower amount, and treat the difference like you treat other unexpected things, e. g. put it to savings immediately or whatever. How big is the difference? – glglgl Feb 2 at 16:47
  • @glglgl almost $900 per month – JacobIRR Feb 2 at 19:34
  • @JacobIRR That's quite a lot (for adequate definitions of "a lot"), but my advice remains the same (and has already been addressed in the answer below). – glglgl Feb 3 at 10:19
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You could simply calculate the point at which it will occur, and how much you will get back, and then adjust your withholding slightly down early in the year by claiming one additional allowance, and then adjusting up by the difference in the last few paychecks (it should be easy for you to see that difference, and easy to calculate when it will occur).

However, my suggestion is to do something different: direct the "bonus" savings into an IRA/401K account, or if you've maxed all of that out, into a savings account. Don't budget for it, just treat it like an unexpected windfall and put it in your emergency stash or savings account - or use it for charitable donations (if you do those annually, you could simply wait until the tax drops off and make the donations then). Since you seem to be doing fine without this money now (as you weren't expecting it), keep on doing what you're doing now and don't consider it in your budgeting. Take a winter vacation, if nothing else!

  • Thanks for the suggestion. I'm going to claim all available exemptions and then leverage my "Additional withholdings" to help tune the amount to be correct. – JacobIRR Feb 2 at 20:18

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