My wife and I got married late last year and we didn't change our W-4's to reflect that, only changed our marital status' through our companies. Both of our paychecks still state that we are single, she has her allowances set to 0 and mine is 2. Every tax return, we get anywhere from $3k to $5k back combined when we file. Last year we got around $3k by filing married and jointly (although both our pays stated we were both single).
We are now starting a very tight budget, getting additional jobs, etc and want to get the most out of our paychecks to help pay down our debt snowball faster.
I'm filling out my W-4 now, and am putting 1 for my allowance (and my wife is going to do the same) and we are changing our status to 'Married' in hopes that will get us more in our paycheck each week. But I'm confused when I fill out the 'Two Earners/Multiple Jobs' portion of the W-4 form.
I make just over the $65k limit, which makes me put '4' down for the lowest paying job that is my wife's. I then have to put $610 on the line because that is where my pay falls in between $0-$75000/yr. That dollar amount multiplied by the difference of her pay digit and my allowance is $1830; and divided by the amount of pays left results in $203.33/pay additional tax withheld.
Here is my question/concern...
Is an additional $203.33 going to be taken out of my current pay on top of what is taken out each pay already? This seems counter productive since we are trying to have less taken out due to the amount of refund we receive each year. I'm not understanding this.
Also, should we wait until next year to do this? I'm just worried that doing these changes now are just going to hinder us more than benefit us.
Appreciate all of your help in advance.
ETA: After submitting this question, I noticed the question: W-4 Worksheet for Spouses Filing Jointly: Who Files the W-4? I'll use my form to claim the allowances and instruct my wife to enter '0' for her allowances. My check will take the hit for the federal while hers will not. From my understanding, it should even out.
I apologize for not noticing this thread before.
However, will this change still hurt us this year and should we wait until next year to do this? And I plan on getting another side job, how should I fill out that W-4?
Sorry again and thanks!