For the last 2 years, we seem to be paying more to the federal and we think it may have something to do with how my wife filled out her W4 with her employer. I’m still unsure how it works. I guess my question is…We are married filing jointly. I have one full-time job and my wife has one full-time job, if we both need to fill out a W4 for each Employer, do we need to input our combined (or think we will be making) income for the year in Step 2(b) section 1 for both employers W4’s? I think that’s where we screwed up.
Each spouse needs to complete a W-4 form to submit to their employer so that the employer can use this to calculate the amounts to withhold.
Instead of completing the W-4 forms manually, you can use the W4 calculator to generate the forms for each spouse. Here is the link to the W-4 calculator: https://turbotax.intuit.com/tax-tools/calculators/w4/
The amount you enter in Section 1 is derived from the table in Section 4 based on your separate annual incomes. You should complete the rest of step 2 in line with the instructions on page 3 of the W-4.
After that, only the spouse with the higher paying job needs to complete steps 3 and 4 on their W-4.