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I have about $110K non-qualified pension in W2 Form. I would like to increase the Federal Tax Withholding from the current 23% to about 30%. The amount of each paycheck varies from $900 to $24K. Therefore I am not able to use "Additional Amount Withheld from Each Paycheck on W4 Form. The Payer requires me to submit a W4 in oder to change the federal tax withholding, but not sure how W4 can help me to achieve an about 30% tax withholding for each my paycheck.
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With a payment range that wide, there is no way to accomplish a fixed percentage increase because higher amounts on a given paycheck are automatically taxed at higher rates. If the annual total in box 1 of your W-2 is relatively stable, just ask for an addition amount of withholding on each paycheck equal to 7% of the annual total divided by the number of paychecks during the year.
If your annual total is not relatively stable, you really can't predict what percentage increase you need anyway, so your best option will be to reduce your withholding allowances to increase the amount of withholding by an amount that increases with increasing amounts on the paycheck, but not by any fixed percentage. If you are married, you've reduced your withholding allowances to zero and are still not having enough withheld, you can mark "Married, but withhold at higher Single rate" on the W-4 or W-4P.
With a payment range that wide, there is no way to accomplish a fixed percentage increase because higher amounts on a given paycheck are automatically taxed at higher rates. If the annual total in box 1 of your W-2 is relatively stable, just ask for an addition amount of withholding on each paycheck equal to 7% of the annual total divided by the number of paychecks during the year.
If your annual total is not relatively stable, you really can't predict what percentage increase you need anyway, so your best option will be to reduce your withholding allowances to increase the amount of withholding by an amount that increases with increasing amounts on the paycheck, but not by any fixed percentage. If you are married, you've reduced your withholding allowances to zero and are still not having enough withheld, you can mark "Married, but withhold at higher Single rate" on the W-4 or W-4P.
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