I recently got married and am updating my W4. I looked at my last pay stub to see what is currently being withheld in taxes and it's about $700 (local + state + federal). After I completed my W4 form, I ended up with a number of $565 for "additional withholding." If I submit this, does that mean I will have $700 + $565 (so $1265) withheld from my future paychecks? Or only $565? I guess I am confused by the term "additional." I just assumed I'd be withholding less now that I'm married, not more. Thanks!
Yes. Additional means "additional" as in "in addition to what is withheld based on the number of claimed allowances".
I recently adjusted my withholding, and used IRS Pub15 to figure out how my employer was figuring out how much to withhold. Then I figured out how many allowances to claim to get the amount I want withheld reached by last paycheck of 2017. We'll see how good my computations were next week when I get my next paycheck.
my recommendation, Nicole, is that you simply change your filing status and nothing else -- wait and see how your paycheck changes. THEN see what to do.
Remember that the US income tax system is progressive -- that is the tax rate progresses (goes up) as your income goes up. On the other hand, deductions reduce the amount of your income subject to tax.
Lets assume that both your and your spouse pay tax on 90,000, after deductions and all that other jazz. For 2017, 90,000 filing as single, your tax rate is 5226.25 plus 25% of (90,000-37,950) = 5226.25 + 18238.75. So together you and your sweetie would've payed 36,477.50. However, the brackets don't scale the same married filing jointly. Instead, 180,000 joint taxable income is taxed as 29752.50 plus 28% of (180,000 - 153,100), or 37,284.50. It seems, looking at the tax brackets I found at https://taxfoundation.org/2017-tax-brackets/, that as income rises, there are subtle differences in how the brackets are constructed between Single and "Married Filing Jointly".
In other words, don't count on your taxes going down.