W4

Forum|Forum|2 years ago
May 29, 2024
2 replies
35 views

Spouse and I both work. I make a significant amount more. I claim married. She just changed to filing married filing single. We want to minimize our taxes owed, but also want to have some disposable income. What are the best options for us?

Ask the Experts - W-4 II - May 2024

FranklinF

Level 6

Per IRS:

If you and your spouse file separate returns, you should each report only YOUR OWN INCOME, DEDUCTIONS, and CREDITS on your INDIVIDUAL TAX RETURN.

Separate liability. If you and your spouse file separately, you each are responsible only for the tax due on your own return.
Itemized deductions. If you and your spouse file separate returns and one of you itemizes deductions, the other spouse can’t use the standard deduction and should also itemize deductions.

1. Each Spouse MUST Complete their own W-4 STEPS 1 trough 5 as applicable.
2. For STEP 3 of IRS Form W4, taxpayers should COORDINATE to make sure of NOT claiming the SAME
DEPENDENT.

3. Bear in mind that when filling out STEP 3 of form W-4,that the amount withheld INCREASES

to the extent number of dependent decreases. A taxpayer may choose to leave STEP 3 blank

to increase his/her withholdings.
4. Complete STEP 4.

About Form W-4, Employee's Withholding Certificate
Tax Withholding Estimator

For making adjustments in the middle of the tax year, please read the post from the following link:
Underpayment Penalty

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smcknight

Level 2

Your wife selecting Single or Married Filing Separately is a higher withholding rate for her income. However, the total income is the basis for the final tax bracket at the end of the year. Particularly if her wages are substantially lower, the selected status may not require an amount withheld that correlates with your total income. For the best outcome, I suggest using the W-4 calculator : https://turbotax.intuit.com/tax-tools/calculators/w4/

The above tool can provide a more accurate scenario of the required taxes based on the total income. There is also the option on Form W-4 to have an additional amount withheld on the Form W-4 (Line 4C) that can be adjusted to meet your needs.

Thank you for joining us today and have a great rest of your day!
SMcKnight, EA

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