Correct deductions

[Carmenb1121]

Hello, I recently changed jobs where I received a significant pay increase.  I am a single mother with one child remaining at home.  I was surprised to see that regardless of receiving a large increase, my take home pay wasn't much more than before.  How can I make sure I am receiving the most "take-home" pay every month?

[OmM1]

Hello Carmenb1121

Thank you for reaching out with your tax withholding question today.

First, congratulations on your new job with significant pay increase.

Unless you take precautions in filling out W4 correctly, people who change jobs during the year, may end up owing taxes at the end of the year. This happens for the simple reason that your current employer will not know how much money you made with other job and will not be deducting taxes fully. So please make sure that when you submit your W4 form, you still pretend that you have a second job – obviously, you know how much you made at the job and will not be making any more from that job.

It appears that your issue is not what I mentioned, as a matter of abundant caution; your issue is that you feel that much tax is withheld from your paycheck, such that you are not seeing much increase in your take home pay.

To make sure that just enough is being taken out from your paycheck, please do revisit and submit a new W4 form (you can submit a new form, any time you have a change in your situation). While submitting the revised W4 form please ensure that you complete step 2 and 3 completely and carefully. Please also make sure that you are selecting correct filing status.

Hope this will resolve your issue.

Thank you

[Carmenb1121]

Hi, I guess that is the question I have...as a single mother of one how should I fill out the w4 to ensure I receive more money in my paycheck?

[kdevere]

It sounds like you may be eligible for Head of Household filing status, if you are filing single with a dependent if you meet the following requirements:

1. You're not married, or you’re considered unmarried on the last day of the year.
2. You paid more than half of the cost of keeping up a home, that was your home and the main home of your child for more than one-half of the year.
3. Your child is your qualifying child for purposes other than the dependency exemption and the child tax credit.  

See Publication 501, Dependents, Standard Deduction and Filing Information for details.

If you indicate that and include the dependent in step three, that would minimize the with holding, and should allow you a maximum take home pay.