W4 Help

[briannagan]

Hello crew!

I need some help with my wife and I’s W4. I’m stressed to the moon about this and I don’t know why - I just want to figure out what makes the most sense for my family. Hear me out and let me know if you can what I should do. I’d love to connect.

So, we have 2 kiddos. I make more than her but it’s tricky because my income fluctuates due to tips. Let’s say one year it’s 70k, the next 80k. She makes 60k so our incomes are close for the most part but I definitely earn more. I just don’t want to owe anything at the end of the year -

1. Are we ok to do married filing jointly and both of us just click the box where it’s 2 incomes that are similar?

We’re close in pay, but how close does it need to be?

2. I claim the 2 dependents because I’m the higher earner?

3. When I ask her what hers is she says she doesn’t know and that it’s always been 0. But now with the new W4 I want to make sure it’s dialed in.

4. State of Minnesota - this has the 0/1/2/3. How should be both go about that? Me claiming 3 for me plus the 2 kiddos just feels like a lot. And then her claiming 0 I don’t want her paying more taxes if she makes less than me.

It’s a lot I know but please someone I’m so stressed. It’s hard for me to do the calculators because every week is different for my pay. 

Maybe for state I can do 2 and she can do 2 so we arrive at our 4 allowances for a family of 4? But I feel like that won’t be enough withheld? Or is it

id be happy to call or chat or zoom with someone please let me know - coffee on me

[ReneeM7122]

In 2020, married taxpayers who file jointly can claim a $24,800 standard deduction. Withholding allowances reduce your taxable income by $4,300 for each one that you claim.  You can use the TurboTax W-4 withholding calculator and try a few different scenarios to see if there is a difference in your bottom line.

Withholding is more of an important factor because you want to ensure that you don't owe anything next year.  The tip income isn't relevant if you file MFJ because the total allowances that you are both entitled to are divided between you as a married couple.  You would figure this based on both of your incomes on the W-4 worksheet, which you can find in TurboTax in the search box.  Since your income fluctuates from month to month, the withholding calculator can help your spouse to ensure that her W-4 withholding is correct, but you will have to input information based on past averages.  Since she has always withheld 0, she will need to fill out a new W-4 if that is needed, based on what the calculator tells you. 

It is difficult to estimate exactly when income fluctuates, but don't worry.  You can adjust your W-4's throughout the year if necessary.