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We were married earlier in the year and currently updating our 2018 W4's to reflect our new married status. The 2018 W4 is a bit confusing as based on how we have it currently setup, it looks like we are going to be taxed much more compared to filing both single.

A bit of details:

  • Married earlier in 2018, no children
  • Myself and wife both work
  • We both plan on maxing out our IRA's

When filling out my wife's W4, her companies system automatically marked 0 allowances to claim. We also filled out the Two-Earners/Multiple Jobs worksheet for my wife's W4.

What is the difference between selecting married vs married, but withhold at higher single rate? Do married couples that file jointly select "Married, but withhold at high single rate"? Or is this an option that is only selected when you are married and file separately?

It seems that after having 0 allowances and additional money (just over $300) to be withheld, we are going to be taxed higher compared to being both single.

  • One thing to remember is that the W4 is just to get the correct amount of taxes withheld. It has nothing to do with how you will actually file your taxes. Basically you make a guess at your income for the year, figure out taxes owed on it and then jigger the exemptions and extras until the amount withheld is about right. You can change it during the year if you find that you are withholding too much or too little. – zeta-band Jul 2 '18 at 23:01
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What is the difference between selecting married vs married, but withhold at higher single rate? Do married couples that file jointly select "Married, but withhold at high single rate"? Or is this an option that is only selected when you are married and file separately?

Choosing "Married, but withhold at higher single rate" is available for all married people and is typically viewed as a simpler option than going through the worksheet for the W-4 when both spouses have earnings.

Since the employer doesn't know about your spouse's earnings, the 'married' checkbox really works best for people with non-earning spouses, if there are multiple earners you either need to go through the worksheet to calculate allowances/additional withholding as you did, or choose the higher single rate which is based on half the standard deduction, and halved brackets. In my view it's better to take some time and do the worksheet to get a more accurate W-4.

It seems that after having 0 allowances and additional money (just over $300) to be withheld, we are going to be taxed higher compared to being both single.

Under the new tax law marriage penalties are less common, but they certainly still occur at very high incomes and very low incomes where various credits/limits come into play that aren't doubled for married filers.

  • Thank you! That is a great explanation. If I understand correctly, it's recommended to either check "married, but withhold at higher single rate" and leave multiple earners worksheet empty or select "married" and complete the multiple earners worksheet? That would be to avoid too much tax withheld if both "married, but withhold at higher single rate" and multiple earners worksheet filled out. – jdgray Jul 1 '18 at 15:26
  • Yeah, typically it would be "Married, withhold single" and the normal amount of allowances i.e. if no kids one allowance each. If you used the two-earners/multiple jobs worksheet and checked "Married, withhold single" you'd likely over-withhold. I think it's best to use the worksheet and stick with "married". – Hart CO Jul 1 '18 at 16:17
  • Also, note the huge difference between "taxed at a higher rate" and "having income withheld for taxes at a higher rate".... The tax that is being withheld from your paycheck is completely separate from the taxes you have to pay to the IRS. They're just trying to help you be able to pay your taxes. – xyious Jul 3 '18 at 19:29

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