How to adjust W-4 to avoid owing taxes this year

[Mitkin40]

Hi, 

Last year (2023) I had my W-4 filled out as married with 1 dependent, and my husband had the same. However when it came time to file taxes I had not had enough taxes withheld and ended up owing $12000. I'm trying to figure out how to avoid this problem again this year. My paycheck varies from week to week, but I expect to make around $135,000 this year. My husband makes a similar amount.  How should I adjust my W-4 to avoid underpaying taxes throughout the year? 

Thanks,

Carrie 

[AR_CPA2]

Hello Mitkin40, 

Thanks for joining this event!

Since you owed this much in taxes for 2023 when you both claimed 1 on both your W-4's.  I would definitely suggest you both check out this W-4 Calculator (link below), enter the estimated income you think you would earn in 2024 and update your W-4 as soon as possible.   

Have a great day!

https://www.irs.gov/pub/irs-pdf/fw4.pdf

https://turbotax.intuit.com/tax-tools/calculators/w4/

[Mitkin40]

Thank you for your response. I changed my W-4 status to single, but have not seen a significant change in my tax withheld. I will update to 0 dependents and add the additional withholding. What percentage of my income should be withheld for federal taxes each pay period? Since my pay varies, it can be hard to tell if the right amount is being withheld.

Thanks!

[AR_CPA2]

All employers use the IRS tax withholding tables, where the withholding amount is based on the amount of annual wage income and your filing status.  Once you update your W-4, you will see the reduction in your take home pay and increase in the federal income tax withholding.

All the best!