withholding certificate (form W-4P 2024)

[OldHarley41]

2024 Turbo Tax questions

I am 74 and my wife is 70. My wife and I are both retired. She for 1 year and I for more than 12 years. We file Married Jointly.

Our incomes are based on the following:

I receive a pension and Social Security checks monthly. Additionally, I receive annual funds from RMD distributions from my deferred comp account.

My wife receives similar monies with the exception of RMD distributions as she has not reached the required age.

For myself:

In 2023, our tax rate was 12.58%. My pension withheld at approximately that amount.

Neither my Social Security (0%) nor my RMD distribution (10%) withheld enough tax.

The result was that at the 12.58% tax rate I was short (under withheld) by $1307.

For my wife:

Because my wife worked until August of 2023, she was collecting a paid salary AND Social Security payments.

Her salary withholding was an additional $700. more than was required; however, both her Social Security (0%) and pension (.015%) under withheld.

At that same 12.58% tax rate, she under withheld by nearly $3900.

Our total owed was around $5200. There were also penalties added for not withholding enough.

I paid this 2023 tax with penalty and additionally am currently making quarterly 2024, 1040ES Payment Vouchers to make up for this underpayment.

Obviously, now my wife is retired, her 2024 paid salary will be gone. The question is: Do we proceed to increase withholding on our pension percentages or wait it out and see how taxes look this year?

[FranklinF]

Per the INTERNAL REVENUE SERVICE

Your SOCIAL SECURITY BENEFITS may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.

The base amount for your filing status is:

• $25,000 if you're single, head of household, or qualifying surviving spouse,
• $25,000 if you're married filing separately and lived apart from your spouse for the entire year,
• $32,000 if you're married filing jointly,
• $0 if you're married filing separately and lived with your spouse at any time during the tax year.

Top Frequently Asked Questions for Social Security Income 

Also you may consult a Financial Planner or Tax Professional about your particular circumstances but in the meantime I will share with you a DIY (Do It Yourself) approach:
Tax Calculator 2023 


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[Anonymous]

Good afternoon, and we thank you for joining us, OldHarley41!

You asked, "Do we  proceed to increase withholding on our pension percentages or wait it out and see how taxes look this year?"

First, I would like to say you good job to you on being proactive by reviewing your tax withholding amounts to ensure there will be no unpleasant surprises when it comes to tax time.

Considering your specific situation, and being that your spouse is now fully retired, you could potentially see a lower tax liability overall, which would lower tax liability and  therefore it may not be necessary to make any adjustments to withholdings, especially when you calculate in the fact that  you are wisely, making estimated tax payments. That having been said,  I would still strongly suggest using a tax estimator calculator to best determine where you are at this point in terms of your tax liability and withholdings, to see if you need to make changes to your withholdings as soon as possible, and then adjust as necessary using the form W-4P, for pension income and the form W-4 V, for social security income. 

For additional information on determining withholdings and tax estimations, please click on the links below:

• TurboTax Withholding Calculator 
• IRS Withholding Estimator Tool 

Please feel free to reach backout with any additional questions or concerns you might have!

Have a great rest of your day!

Terri Lynn, EA

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