Extra Withholding

[Spaceman404]

My wife and I work for two different companies, and Federal and State taxes are deducted from our respective biweekly paychecks.

Per the instructions in Form W-4, we used the Deductions Worksheet to determine and specify the amount of extra withholding per paycheck.

Given that taxes are deducted from our paychecks, does there need to be additional withholding?

[Donna F 77]

According to IRS, if you fill out the W-4 completely, then you should have enough tax withheld from your paychecks.  However, sometimes it's hard to estimate your actual income if you receive any income from sources other than your paychecks.  It will probably benefit you to put your information into the IRS Tax Withholding Estimator to make sure that it also agrees with the info on your W-4 forms.  Here's a link to the IRS Tax Withholding Estimator:
https://www.irs.gov/individuals/tax-withholding-estimator

[crodjom1]

Hi @Spaceman404,

Great question!

The answer depends on whether you had a balance due or a refund at last year end.  You would want to add additional withholdings if you owed at the end of the prior year to avoid any penalties and interest.  A great tool to use would be our Turbo Tax W4 calculator.  Here is a link to the tool:

Turbo Tax W4 calculator 

The tool will help you estimate how much of additional withholdings maybe needed for 2023 based on your current W2 information.  

I hope you find this information helpful and feel free  to ask more questions.  We'd be happy to help!

[Spaceman404]

Thank you for your responses, @Donna F 77 and @crodjom1. If I pay extra withholding up front (as part of W4), will the amount of taxes automatically captured in my paycheck towards the end of the year reduce?

[Tax Hero Niki]

Hi Spaceman404! If you pay extra withholding upfront (as part of W-4), then it will be reported on your W-2, and included as a factor when filing your taxes. Are you saying you might temporarily set it up for additional withholdings? If you add on additional now, it will not reduce the amount withheld later.

[CatherineR]

If more withholdings are added to your paychecks each week thru the W4 process, this will increase the amount of withholdings by the end of the year not reduce.   Depending on your tax liability at the end of the year it may help to increase your refund or reduce what you owe.  I hope this answers your question.  Feel free to ask more here or at our next Ask the Expert event (stay tuned for dates and subject matter).