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My husband took a new job recently and is making 125K in salary in California. I make 65K. When we were filling his W4 (married filing joint), the additional withholding on his W4 came to 'additional $400' per paycheck under MFJ. Why is this amount withheld in additional, as I pay my taxes separately?

Thanks in advance.

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When the question of withholding comes up, I usually reach over to my night table and read from my copy of Circular E, otherwise known as Publication 15. This publication will show you what will be withheld based on your filing status, income, and number of allowances (exemptions) claimed. I suggest you do a dry run of your 2012 tax return, entering the projected income numbers, and see what your federal tax bill will be. From there, it shouldn't be tough to get your withholdings on track.

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    Don't forget to compare what will be withheld this year to what the final tax was for last year. Make sure that this years withholding is not less than last years tax to avoid penalties and the requirement to file quarterly. May 3 '12 at 12:22
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    Oh God, it's on his night table! Jan 20 '15 at 22:29
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You are having taxes withheld separately on your income, but the amount that you are obligated to pay is the total shown on your MFJ return. Of course, the amounts withheld are credited against the tax due for that year, and you might have to pay more on April 15, or get a refund back if you were over-withheld. Also, on an MFJ return, you and your husband both are individually legally bound to pay the entire amount, not just your individual share of the total amount.

The marginal tax rates increase with increasing income. Since your $65K and your husband's $125K get summed up on a MFJ return, the tax due on your MFJ return is greater than the sum of taxes due on MFJ returns showing incomes of $65K and $125K respectively. I don't know how the $400 figure you quote was arrived at, but I would suspect that if you have any investment income through mutual funds at all, you both would be better off requesting to have taxes withheld at the "Married but withhold as if I were a single person" rate so as to avoid a penalty for paying too little tax or having to scrabble to make a 4th quarter Estimated Tax Payment once the mutual funds make their annual distributions in December. In either case, you would likely need to file Form 2210 to avoid penalties for not paying taxes in timely fashion.

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  • Thanks Dilip. We don't have any other income apart from our two salaries of 125k and 65k. The 400$ came in when calcualting the withholding amount on W4 form for MFJ (using online calculator after entering both of our incomes). Do you mean we would be better off filing 'Married filing separate' in order to reduce the tax bracket on each of us?
    – kerth
    May 2 '12 at 18:55
  • >Do you mean we would be better off filing 'Married filing separate' in order to reduce the tax bracket on each of us? The two of you together will likely end up paying more tax filing MFS than as MFJ. If you use a (non-online) tax return preparation program, just plug in the anticipated 2012 numbers into the 2011 program and ask it to calculate MFS versus MFJ to get a ballpark estimate of the difference. May 2 '12 at 19:17
  • Note that you can withhold at the singles rate, but still file jointly at the end of the year. Its not like the IRS is going to fine you for giving them too much money through out the year.
    – Kellenjb
    May 2 '12 at 22:51
  • @kerth As Kellnjb points out and as I perhaps should have emphasized more to you, the rate you ask for your withholding is whatever makes the numbers come out right for your filing status on Form 1040. But be aware that if you have tax withheld at the MFJ rate and then decide in April 2013 to file MFS, then not only will the total tax be higher, but each of you will be able to claim only what was withheld from your paycheck as a credit towards the tax due from you; extra withholding from one spouse's paycheck cannot compensate for underwithholding on the other's. With MFJ, you are a team. May 3 '12 at 0:44

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