Starting new job- how do I make sure I have enough withheld on W4?

[gbschneider1]

I had a full time job that took out taxes Jan 1 - April 28th. Then I started a new full time job on May 2nd. How do I ensure I have enough taxes being taken out of my paycheck? The IRS witholding calculator isn't clear if the $ I should be entering to estimate if I will need to have additional $ witheld is gross or net, and it's showing I'm going to owe $12,000. In my previous job I filed as single, 0 and have set up my new job w-4 to have the most withheld. I'm just worried with a higher salary that I'll owe and would rather have more taken out now and get a refund than have to pay. Any advice on calculating to see if I'll need to owe or how to identify how much additional to be taken out of my paychecks would be helpful. I don't have any additional investments or sources of income. 

[conniem123]

Hi gbsneider1,  It can be tricky to find that sweet spot of tax withheld to not owe and not receive a large refund. When using estimating tools you do enter gross wages.   There is a TurboTax W-4 Calculator that will walk you through the steps of the Form W-4

https://turbotax.intuit.com/tax-tools/calculators/w4/

Once you complete the form, give it to your employer. Then, keep a close eye on your next few paychecks to see how the changes impacted your federal income tax withholding.  Keep in mind we are in late July so changes do not have a full year of impact.

Here are the 2022 tax brackets by filing status.  This will also help you since you had multiple jobs.  You can then compare to the year to date withholdings on your paystubs, the last one from the previous employer plus the most recent paystub from your current employer.

https://turbotax.intuit.com/tax-tips/irs-tax-return/what-is-my-tax-bracket/L3Dtkab8G

I hope you find this helpful!

[gbschneider1]

thank you! to clarify, if I use the tax bracket info you shared to calculate out what my taxes will be for the full year, should I be looking at both jobs separately or combined for the year? (for example, do I look at my bracket for job 1 and calculate out taxes, then look at job 2 or combine the wages from both jobs together?)

Additionally, when I manually calculate, am I just supposed to use just federal withholding tax or do I include SS & medicare tax? I assume the way to get to the "income" is gross income  - pre-tax deductions because that's what would be taxed, but want to make sure. 

Also! I received a bonus earlier in the year - that was taxed correctly, should I be including that in my calculations or look at the taxed amount on that separately?  

[conniem123]

Hi,  when you determine which income is taxed at which of the brackets, you need to look at your total taxable income for 2022.  When you calculate use taxable income, and once you have your tax calculated you would compare that to the federal tax withholdings on your paystub, not the SS & medicare.

Yes, your bonus will be taxable income.  You should see that bonus amount in your year to date earnings on your most recent paystub.

Hope this helps!

[gbschneider1]

thank you so much - this is helpful! when calculating it out myself, should I be subtracting the standard deduction (or itemized deductions) I plan to claim? For example, let's say my salary is $200,000 for the year in total and with deductions each paycheck, my federal taxable wages are $175,000. Before I use the tax brackets to determine if I'm having enough taken out, should I subtract $12,500 and calculate my tax liability based on $162,500 (or is tax liability based on the federal taxable wage amount of $175,000). 

Again, these numbers are made up and I just want to make sure I'm not missing a step!