What are your experiences with the use of the W-4 worksheet to determine deductions?

Question

I have to redo my W-4 because of a change in my marital status. When I complete the questions to get the number I should claim, it is very high. Obviously, having less taken out is a good thing, but my concern is in getting stuck at the end of the year with a heafy tax obligation. Thoughts?

Answer 1

I have used both of these tools from the IRS and found them useful. I used the first link when my husband and I separated. I used the second to help a friend of mine. At the end of the year we were fairly spot on.

http://www.irs.gov/individuals/article/0,,id=96196,00.html

http://www.irs.gov/publications/p919/ar01.html

Answer 2

If you're married and both working, you and your spouse should sit down together and figure this out using both incomes. The number you get is the total allowances that you should claim between you. For many married couples, that will be 1 or 2. If it's 1, the one with the higher earnings should claim 1 and the other should claim 0.

Answer 3

If all you have is W2 income and very few deductions, go with 0 or 1. If you have a lot of tax write offs, then 0 will be ok. If not go with 1.

Answer 4

Visit www.irs.gov and use their W-4 calculating tool. It allows you to enter your estimated income and projected credits and deductions to determine how many allowances to claim. It can be a little more accurate than the worksheet if you have unusual credits....like education credits that the worksheet doesn't take into consideration.

Answer 5

Unless you have a lot of deductions or have a lot of dependants choose Married 0 or 1.

Answer 6

it doesn't matter what you claim during the year, what matters is what you file on april 15. you want to break even--no big refund (why give uncle sam interest free money) or no big debt (owe him $). based on your income & deductions play with the figures. use what your boss uses at http://www.irs.gov/pub/irs-pdf/p15.pdf