Hello - both myself and my husband file jointly and have full-time salaried positions. However, every year we seem to under-pay our taxes and have to pay more and a underpayment penalty. Should I be taking out more from my W-4? How do I do that? Do you have an example of what a W-4 should look like that I submit to my employer? Currently, most of the fields are blank since I am salaried I thought they took out the right amount of taxes based on my salary?
You might owe an underpayment penalty if the total amount of tax you paid through withholding is less than the lesser of:
Therefore you must ensure that you are having enough withheld from your pay to meet these requirements. Please note it is referring to tax liability, the amount of tax calculated on your income , not the amount due after subtracting your withholding.
Submitting a new W4 to your employer will fix this. I have included a link to our W4 calculator where you can enter your information and it will estimate how much you should have withheld :
https://turbotax.intuit.com/tax-tools/calculators/w4/
Mary, tax expert