Knowing the right amount to withhold

[MarhondaE]

I would like to know how much I should withhold with my W4 so I'm not owing at the end of the year, but also don't need a huge refund. 

[KarenL4]

Hi,

Good for your for getting ahead of the game!  We have a tool for you.  You can easily get to the correct W-4  using our free W-4 calculator.  This Tax Caster may also be helpful. 

Another short-cut if things are fairly constant from last year (you're making about the same amount of money and have withheld about the same YTD) is to take your under withholding amount (tax due last year) and increase your W-4 to withhold that amount over the remaining pay periods.  For example, if you were under withheld $1000 and you have 10 pay periods remaining, you can submit a new W-4 with additional withholding of $100/pay period.  That may not be perfect but can get you closer...

If you have additional questions, please post below. 

Please give a thumbs up to cheer below if this answer helps!

Best,

Karen

[Lane5]

The first step is to determine what your results will be is nothing changes. You can do this by using the TurboTax W4 Calculator https://turbotax.intuit.com/tax-tools/calculators/w4/
Be sure to answer questions correctly. If the result is a refund, then there is no need to update your W4, unless the refund is more than you would want. If the refund is too much, then you will want to update the W4 to have less withheld from your paycheck. This can be done by adding a credit amount on Line 3 of the W4.  If the result is a balance due, the you’ll want to update your W4 to have additional amounts withheld from your paycheck.  This can be done by adding an amount on Line 4c of the W4.

[Esther M]

Hi MarhondaE,

It's a good idea to know the right amount to withholding in order to avoid owing the IRS at the end of the year and also to avoid depriving yourself of much needed funds when you withhold too much.

Good news! Turbo Tax has a calculator that you can use every year to estimate how much to withhold and you can print it out and give to your employer. The IRS also has a similar tool. Either one will work just fine.  Here's the link to the calculator tool:

W-4 Calculator    IRS - Tax Withholding Estimator 

Hope this answers you question.