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61 votes
Accepted

I claim one and my wife claimed zero on our W-4s, but we still owe...why?

The W-4 functions best when there is a single earner with a single job. When there are multiple earners and/or multiple jobs per earner, it doesn't function quite as well (without additional ...
Derek's user avatar
  • 841
39 votes
Accepted

Does owing taxes or getting a tax refund imply my paycheck is off?

The withholding is not that accurate. Look at the personal allowances worksheet (PDF). A single allowance could be You, filing. You, filing married; spouse not working. You, filing Head of ...
Brythan's user avatar
  • 21k
30 votes
Accepted

How do you know how much to withold on your W-4?

My father says that if I need more money, I can withold less on my W2 (which won't result in the same oh here's $3,000 come tax return time), but will give us access to more money. He's right. So ...
RonJohn's user avatar
  • 50.7k
27 votes
Accepted

How much do I withhold for an employee receiving $2000 every two weeks?

For the federal tax, start by looking at IRS Publication 15, the Employer’s Tax Guide. The withholding tables that you would use are in IRS Publication 15-T, Federal Income Tax Withholding Methods. ...
Ben Miller's user avatar
  • 116k
24 votes

401k and Payroll Deduction - $0 Take Home

I found the answer. It turns our FICA taxes (Social Security and Medicare) are based on the full gross pay, not after the 401k deduction. Your 401(k) deductions do not reduce FICA wages. Your 401(k)...
Tom Baxter's user avatar
24 votes
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In the US, how do we make tax withholding less if we lost our job for a few months?

You can submit a new W4 to your employer any time you need to make changes. You can reduce federal income tax withholding by adding deductions to line 4(b): To know how much to enter in the ...
Hart CO's user avatar
  • 70.5k
21 votes

Does owing taxes or getting a tax refund imply my paycheck is off?

This stems from the (possibly incorrect) assumption that my work is withdrawing taxes from each paycheck correctly. I think this stems rather from an ambiguity in the use of the word "correctly". I ...
user4556274's user avatar
  • 1,997
20 votes
Accepted

What does "Spouse Works" mean in W-4 form?

"Spouse Works" is not a term. It is an incomplete sentence. The complete sentence would be "Your spouse works." or "My spouse works." This means, "your/my husband or wife (spouse) has a job (works)". ...
Philip's user avatar
  • 448
18 votes

401k and Payroll Deduction - $0 Take Home

It is the social security and medicare tax, assuming your employer is otherwise doing the accounting correctly. These are deducted from your gross income regardless. Source: Did the same thing one ...
CQM's user avatar
  • 20.2k
18 votes

How will my income tax vary throughout a year where my income fluctuated

In the US, income tax rates are calculated at end of year based on your income for the entire year. Your tax return is the reconciliation of what was withheld vs what is owed. Your income tax ...
Hart CO's user avatar
  • 70.5k
18 votes

Can someone withhold $0 in federal income tax?

You should not mark "exempt" if you're not exempt. The requirement for exemption is listed in the current instructions: You may claim exemption from withholding for 2022 if you meet both of ...
littleadv's user avatar
  • 177k
17 votes

How do I get my withholding correct when a significant amount of my income doesn't arrive until late December?

The most obvious answer is to pay an estimated tax (using form 1040-ES) for the year-end lump sum income items you have. The last 1040-ES payment date is January 15th of the year after, precisely to ...
littleadv's user avatar
  • 177k
16 votes

How do you know how much to withold on your W-4?

The goal of withholding is to get as close to the actual amount of tax you will owe by the end of the year as possible. So ideally, you should have no refund and owe no tax when you file your tax ...
user102008's user avatar
  • 17.3k
15 votes
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What has happened to the W4 form for 2020 - paying a lot LESS federal taxes?

What happened was Tax Reform, implemented in 2018. The new tax code pushed through a new withholding table contained within Publication 15. Payroll departments withheld according to the new table and ...
JTP - Apologise to Monica's user avatar
15 votes
Accepted

Understand 401k contribution

While you are losing a lot of monthly take home income, you are gaining a tax advantage, increasing your income, and net worth. Every two weeks (two months per year you will get three paychecks in ...
Pete B.'s user avatar
  • 76.7k
15 votes

Can someone withhold $0 in federal income tax?

Yes, it is possible to have $0 in federal income tax withheld from your paycheck. The W-4 form was revamped in 2020 to be more accurate, straightforward and easier to use. Under the old form, you ...
Ben Miller's user avatar
  • 116k
14 votes
Accepted

Is the return of an IRS withholding taxable?

It is not Withholding is money FROM your income being hold back to pay the tax. If the tax turns out to be lower, then the leftover is returned (in your case all). As such, that is not income.
TomTom's user avatar
  • 11.5k
12 votes

What happens if I intentionally throw out a paycheck?

How/when does my employer find out? Do they get a report from their bank stating that "check 1234 for $1212.12 paid to John Doe was never deposited" or does it manifest itself as an eventual ...
mhoran_psprep's user avatar
12 votes

Does owing taxes or getting a tax refund imply my paycheck is off?

Two things I can think of: You might have changes to your AGI that the payroll system doesn't know about. Extra income like dividends or a side job, for example. You filled out your W-4 incorrectly, ...
RonJohn's user avatar
  • 50.7k
11 votes
Accepted

Do you pay less US income tax if you withhold more?

Your assumption in the first paragraph is correct: "the amount you withhold from a salary for federal income taxes does not change the amount you actually pay in taxes". That part however: "my Wages ...
void_ptr's user avatar
  • 3,128
10 votes

What happens if I intentionally throw out a paycheck?

In a nutshell, throwing your taxable income in the trash does not remove it from your taxable income; you still have to report in your tax filing, and pay taxes as needed. Especially as you could at ...
Aganju's user avatar
  • 37.7k
10 votes
Accepted

Need advice on filling out w-4 form. Is it always good to withhold my income from taxes?

Neither of you are exactly right (if you've interpreted your friend's theory correctly). Depending on the number of allowances you claim, a portion of your paycheck will be withheld each period for ...
D Stanley's user avatar
  • 137k
10 votes

Understand 401k contribution

Using the numbers provided in the question, contributing $260.42 to 401(k) reduces the federal income tax withheld by $57.29. Thus the marginal tax rate is $57.29 / $260.42 = 22%. Furthermore, $260.42 ...
void_ptr's user avatar
  • 3,128
10 votes
Accepted

Correcting Social Security Administration's record of my income

It is entirely possible that you had no FICA taxes withheld while you were a graduate student on stipend. There is a Student Exception to the FICA tax that may have applied to you. Your 1040 tax ...
Ben Miller's user avatar
  • 116k
9 votes

My first pay had taxes withheld. How to get the personal allowance for income tax?

You haven't given enough information to identify the reason for tax being withheld, but there are a few possibilities: Depending on the period of pay covered, you might correctly owe income tax on it....
GS - Apologise to Monica's user avatar
9 votes

How do I recover income tax withheld to wrong state (where my home state has no income tax)

I was in a roughly similar situation: I moved from MA to WA part way through a year, paid by the same employer. I filed a tax return with MA (which I had to do anyways) and got a refund. Overall it ...
stannius's user avatar
  • 5,301
9 votes
Accepted

Is there a penalty to withholding more taxes at the end of the year?

While that is an extreme example, it is permissible. The IRS considers all money withheld from paychecks as meeting the requirements for timeliness, as long as in the end you make the safe harbors. ...
mhoran_psprep's user avatar
9 votes

How to get a refund from the IRS if taxes were over-withheld?

It's actually your money Let me guess. You're in the habit of just selecting exemptions carefully so your refund is not worth worrying about, and just walking away from your tax situation at the end ...
Harper - Reinstate Monica's user avatar
9 votes

How do I get my withholding correct when a significant amount of my income doesn't arrive until late December?

You have several options: if late in the year you know that you will be writing a check to the IRS and the state, you could change the W-4 withholding to have extra funds withheld from the last few ...
mhoran_psprep's user avatar

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