I need help filling out W-4 form so that I get more money from my paychecks and pay less tax. Recently my circumstances have changed, I am married and have 1 child (2 months old), only I work my wife does not work and my income is $92,000/year and get paid every 2 weeks.

Below is the screenshot of my attempt, but not sure if these numbers apply, I don't want to owe anything at the end of the year, I want to either break even or get refund. Any help is appreciated and thank you.

W-4 Form Screenshot

  • You said your situation changed. How? – JTP - Apologise to Monica Jun 29 '16 at 17:43
  • Baby was born 2 months ago. – German Shepherd Jun 29 '16 at 17:51
  • And how much was the refund for last year? – JTP - Apologise to Monica Jun 29 '16 at 17:52
  • Last year basically most of the year I filed as single and then I got married and changed to file as married towards end of the year. Total refund was over 6k for 2015. I believe large refund was due because I filed as single most of the year. – German Shepherd Jun 29 '16 at 17:54

In this situation I would recommend figuring out about what you would need to pay in taxes for the year. You have two figures (your salary and dependents) , but not others. Will you contribute to a 401K, do you itemize deductions, etc... If things are uncertain, I would figure my taxes as if I took the standard deduction.

For argument's sake let's assume that comes out to $7300. I would then add $500 on to my total to cover potential increases in taxes/fees. You can adjust this up or down based on your ability to absorb having to pay or the uncertainty in your first calcuation.

So now $7800, divide by 26 (the amount of paychecks you receive in a year) = $300

Then I would utilize a payroll calculator to adjust my exemptions and additional witholding so my federal withholding is as close as possible to this number.

Or you can sit with your payroll department and do the same.

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  • Sounds complicated :D. I only have 1 dependent (my child) since wife does not count as dependent. I only contribute $25 every 2 weeks to 401k and that is after tax so its basically $25 cash. Every 2 weeks my salary is about . after health insurance cost and 401k I get cash: $2,199.19 deposited to my account. So I guess about 1339.2 goes towards taxes & health insurance. I am not gonna itemize anything. Usually I fill out 1040EZ and get refund at the end of the year, I dont want to get refund I want to get more cash every 2 weeks and break even. – German Shepherd Jun 29 '16 at 17:36
  • Given that you had a child in the last two months, your refund will change drastically. Do a 1040A from last year with this year's suspected taxable income. Then use the payroll calculator. I do this kind of thing 4 or 5 times per year based upon income changes. – Pete B. Jun 29 '16 at 17:43
  • So my current filing status is M3 (I had selected 1 for A, 1 for B & 1 for C total of 3 for line H) I was thinking now that I have a dependent that adds 1 for D as well so in total 4 would give me more refund but i dont want to owe anything. Someone told me that M4 I might owe something at the end of the year and to keep it as M3 but then how come my dependent child does not give me benefit towards tax? – German Shepherd Jun 29 '16 at 17:53
  • You have to do the math that I outlined if it is worth it to you minimize your refund. Remember word problems from grade school math class? Well they do have real world applications. You could ask you HR department to do it for you (as I stated), but I would rather learn myself. – Pete B. Jun 29 '16 at 17:58
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    Got it. You're suggesting working backwards as I am. And need to calculate taxable income to do that. In theory, the W4 doesn't care about pretax paycheck deductions, only extras like mortgage, IRA, property tax. But you knew that. – JTP - Apologise to Monica Jun 29 '16 at 19:42

First, I'd use an online tax calculator to figure out you total tax tab for the year. Then look through Circular E and figure out from there how much tax you should pay for the rest of the year and work backwards to calculate the number of allowances to get there.

Two friendly warnings -

Since you are doing this midyear, you'll need to repeat this exercise as we go into 2017. These next 6 months, you'll be withholding less than normal to make up for the high holdings so far.

Second, a withholding is like saying tax/don't tax me on $4050. So in the 25% bracket, it's +/- $1000 in tax paid. You can adjust closer via the line 6 on W4 'additional withholding'.

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  • I think this guy is just looking for one of us to do the work for him. – Pete B. Jun 29 '16 at 19:38

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