For higher income households, standard withholding is insufficient to pay the income taxes owed. For example, one family claimed 4 people last year and the two income earners each did M-0 yet still owed the IRS over $10K.

What method do people use to estimate their additional withholding? Is there a handy calculator?

I've found one on the IRS website for 2014. Should I just use it for 2015 as well?

The calculator seems to leave out a lot of things like 401K deductions, and so forth.


Go for the safe harbor. Look at your total tax for the previous year. Not what you owed in April, or what you had withheld, but your total tax. Make sure you have 110% of this withheld this year.

Making the safe harbor allows you to avoid penalties, and avoid the quarterly filing requirement.

Just adjust the additional withholding once or twice a year to keep you on target.

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  • Personally, I've just gone for overkill. My current withholding is set to deal with the years when I was getting the most income from my investments. Most years that means I get a substantial refund from the feds and owe a small amount to the state. My cashflow is such that I can live with that. – keshlam Nov 12 '14 at 7:35
  • +1 I definitely agree with this method, but I try to estimate my earnings much more exactly so that I can actually slightly under-withhold. – dg99 Nov 12 '14 at 16:46
  • If they are consistently missing by 10K, then this gets them withing the safe harbor. Once they achieve that, they can use a more exact if their sources and deductions are well known. – mhoran_psprep Nov 12 '14 at 16:51
  • The safe harbor calculation is based on "total tax"? E.g. on the 2015 1040 it's line 63. It might include additional tax due to e.g. AMT, but conversely it includes credits e.g. child tax credit, residential energy credit. – stannius Feb 29 '16 at 0:56

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