W4 witholding

[tko1020]

Hi, I would like to adjust my tax withholding this year as last year my company didn't withhold enough for me and I had a small tax penalty. I am set up as "single," which would take the most tax from my base pay and bonuses are withheld at a flat 22%, which may be too low for me.  What is the best way to determine the right amount/what to put for the dollar amount in Line 4c of the W4?  Thank you for your time!

[John-H2021]

Hello tko 1020,

Claiming single is the correct thing to do.

As far as line 4-c, if you income is the same as last year the best thing to do is take the balance due you had last year and divide it by the remaing pay periods you have this year. Use that amount for line 4-C.  Remember it usually take 1-2 pay periods for the new withholding to take effect.

[Donna F 77]

Hi tko1020!  There are calculations for figuring the underpayment penalty.  You should probably use the IRS Tax Withholding Estimator to determine how to adjust your W-4.  It will allow you to enter the amount of wages you've already earned for the year.  It will project how many additional paychecks you will have until the end of the year.  Here's a link to the tool:

https://www.irs.gov/individuals/tax-withholding-estimator

If you feel like this will not be enough of  a change with your withholding, you can check out the Estimated Tax worksheet in the Form 1040-ES instruction booklet.  This will help you determine if you still don't have enough withholding.

https://www.irs.gov/pub/irs-pdf/f1040es.pdf