Hello,
Retired, married filing jointly.
Adding interest income this year and need to contribute more to taxes. Should we change our W-4 or just do quarterly payments (since its already almost June, we'll do three payments for this year and not 4).
Opinions?
Thanks Larry
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Hi Larry! Congratulations on your retirement!
Once you retire, your W-4 will become irrelevant as it is intended as a vehicle for your employer to accurately calculate how much federal income tax to withhold from each of your paychecks. In retirement, you won't have anymore paychecks, so the W-4 will become irrelevant.
In your situation, because you anticipate income from sources other than a paycheck, you should consider paying estimated taxes on a quarterly basis in order to avoid a tax shortfall at the end of the year. You can use this Tax Calculator to assist you in determining how much to pay in estimated taxes. As you know, keep in mind that we are almost halfway through the 2024 tax year at this point, so you'll want to adjust your remaining quarterly payments accordingly.
I hope this is helpful!
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