Forget update W4

[Newcome]

When my child turned 17 this year, I didn't update my W-4. So, I will owe over $1500 in federal tax when I file my tax return next year. Can I update my W4 now and make an Extra withholding of $750 per month on 4c to make it up? ( because I only left 2 pay period) Is it a good idea to avoid underpayment? Thanks.

[Bsch4477]

You can avoid a penalty if you owe less than $1,000 in tax. 

[Anonymous_]

Agree with @Bsch4477 

You can also update your W-4 now since withholding is not based on calendar quarters (as are estimated tax payments).

[Newcome]

Thanks. But I think I owe $1500. Because the child credit changed from 2000 to 500.

[Anonymous_]

Adjust your W-4 as soon as possible.

[Bsch4477]

Yes. Just be sure you bring that liability down below $1,000. 

[Newcome]

Thanks. I will adjust the step 3 Claim Dependent and Other Credits to $500. And put Step 4(c) Extra withholding of $750 for a pay period. (because only 2 periods left) And adjust back the Step 4(c) to $0 next January. Is that work?

[Newcome]

Thanks. I will adjust the step 3 Claim Dependent and Other Credits to $500. And put Step 4(c) Extra withholding of $750 for a pay period. (because only 2 periods left) And adjust back the Step 4(c) to $0 next January. Is that work?

[Opus 17]

If you change your W-4 to have lots extra taken out, you need to remember to change it again January 1 so you don't have that excess withholding continue into 2024.

Instead, I suggest changing your W-4 to be whatever is appropriate for your new situation, then make a separate estimated tax payment of whatever you think you will owe, at www.irs.gov/payments.  Be sure to select "2023 estimated payment" as the reason.  The payment should be made before January 15. 

[rjs]

Check with your payroll department and make sure the revised W-4 will actually take effect for the last two pay periods.

Also, don't forget to change your W-4 back again in January, so you don't have an excessive amount of withholding in 2024.