How do I account for federal withholding done by Social Security when completing a W4 for 2017 for employer?

[Stacie17]

For 2017, I will file as Single instead of Married-filing-separately because my husband died 5-22-16. Using my Turbotax Home & Business, I tried to complete a W4 to give to my employer. I currently have Social Security withholding 7% each month, so when I entered the tax-withheld-to-date, I entered the SS amount, as well as what the employer had withheld. After going through all of the steps, the resulting W4 said the employer needed to withhold an extra $514 per month. That would be just over 50% of the salary paid (not SS) and the employer currently withholds $82.35 for federal taxes. How can I get more accurate information to create a good W4 for 2017?

[Hal_Al]

It basically can't be done. The W-4 work sheet is not designed for that.

You should claim exempt on your W-4, as your SS withholding is more than adequate.

Better yet,  what you should do is have SSA stop withholding and then claim 1 withholding allowance on your W-4.

[Stacie17]

Thanks for the quick reply, Hal_Al. This year even with SS and employer withholding I owed $14,000 because of a taxable faculty death benefit I received. In a year or so, the tax bump will happen again when I start receiving RMDs from my own retirement account. Is there any fairly accurate way to figure out how much should be withheld or how much should be paid in quarterly installments?

[Hal_Al]

Turbotax does a good job of doing quarterly estimates.  But, what you first described and your subsequent information is too complex for the W-4 interview.
You should do quarterly estimates.  Once you get your quarters yearly total, you could always use the "additional amount to be withheld" on the W-4 thru employer withholding. But i wouldn't. I'd use quarterly payments.


TurboTax (TT) can prepare the payment vouchers. In your 2016 software, enter at:
Federal Taxes or Personal
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”

Or you can obtain  blank IRS 1040ES estimated tax vouches for 2017 at
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/f1040es.pdf">http://www.irs.gov/pub/irs-pdf/f1040es.pdf</a>

[Stacie17]

Thanks, Hal_Al. That's much closer to what I was looking for. Even with my SS and employer withholding in place, to satisfy the 14K taxes due for 2016, I had to write a personal check for $12,411 and that hurt a whole lot. Turbotax 2016 did prepare estimate coupons for 2017, but that year is likely to be a "quiet" one with only SS, bank interest, and employer's 12K. Thinking of doing the old-folks' standard deduction for 2017, then for 2018 or probably later taking the RMDs and doing quarterly payments. I don't need to start the RMDs until 2021. Thanks, really, for coming back to comments to follow up. Really appreciate it.  😉