Hi @myo1 ,
This is a good suggestion to use Single "0" on the W-4 for a two earner household to make sure there is enough withholding to cover the increased income as a result of two people earning.
There are many factors that impact the taxable income, hence the tax on your income.
- Filing status
- Number of dependents you plan to claim on your return
- Age of those dependents
- Information about pay from jobs
- Pension income
- Contributions to tax-advantaged accounts such as 401(k)s, HSAs, FSAs, etc
- Adjustments to income such as student loan interest paid
- Whether you take the standard deductions or itemized deductions
- Any tax credits you take advantage of
- Other sources of income and tax payments
The best way to gauge where you stand tax wise for a particular year is to use the W-4 calculator. Below are two W-4 calculator tools that will help you determine if you should change your withholding on your W-4 to account for the extra income from inheritance.
W-4 Calculator 2023
Tax Withholding Estimator
In case of doubt, it is always beneficial to have a little extra withholding. Additionally, you can have your employer withhold an additional amount (fixed dollar amount every paycheck) on top of your standard withholding to cover taxes for additional income.
