w-4 questions

[Chris1204]

Hi,

Thank for your offering this FREE Tax advice! I use Turbo Tax each year.

I am married, no children. My husband resides in a nursing home. He is on SSDI. I have worked full time since 1987. Married since 1999.

2 questions:

1. At my new job in 2022 and 2023, my W-4 stated MARRIED. For some reason I chose MARRIED. Yet for the past 37 years I usually choose SINGLE in order for more taxes to be deducted. NUTS ! Can’t believe I did this!

This simple mistake made me owe IRS $1622 for 2023. AND SINCE OVER $1000 the IRS wants me to pay Quarterly estimates. And, I did pay Q1 $403 on 4/15.

HOWEVER, I KNOW my mistake and have corrected my W-4 for 2024 to SINGLE.

Since I know what mistake was made and know it won’t happen for 2024, do I STILL have to pay Quarterly estimates?

1. Since my husband resides in a nursing home and can not deduct taxes from his SSDI because the nursing home needs all the money, should I file taxes as Married Filing Separately? Since this is his only income, $1788 a month, would he not have to file or would it lessen my tax burden by filing separately?

I normally file Married Filing Jointly and owe some tax because of his SSDI.

Thank you, 

Chris1204

[KNDavis · Accepted solution]

Hi Chris1204!

To answer your first question about whether you need to pay quarterly estimates, keep in mind that estimates are just another way to pay your taxes if you don't have enough taxes paid in through withholding.  Since you have a W-2 job, you have the option to pay your taxes 1) through withholding, 2) by making estimates, or 3) a combination of both.  So you don't HAVE to make quarterly estimates, but you'll want to be sure that you have enough taxes paid, either from withholding or estimated payments, so that you don't owe when you file your return.

On your W-4, you can indicate if you have additional income that you need to calculate withholding for.  You would add that amount in Step 4 on the W-4, which would increase that taxes withheld from each paycheck.  

For your second question, whether you live together with your husband will determine whether filing separately may help you.  You mention that your husband lives in a nursing home.  If you lived together for any part of the year, there is a special IRS rule for couples choosing to file Separately that makes 85% of his SSDI taxable, which removes the incentive for MFS. 

But, if you lived apart for the entire year and the SSDI is his only income, he would not owe any tax on the SSDI by filing Separately.  However, your standard deduction would be half of what it would be filing Jointly.  You may want to use our Tax Calculator to do some "What If" scenarios and see if filing separately will save you tax overall.  

Thank you for being a TurboTax customer!

Kimberly, CPA for over 30 years

[LoriLeighEA · Accepted solution]

If you expect to owe taxes of $1,000 or more you would still need to pay quarterly taxes. Typically this applies to freelancers and those who have self-employed businesses. Since you fixed your W4, there should be no need to keep paying quarterly taxes for 2024 - but be sure to include the $403 you have already paid on your 2024 tax return under "estimated tax payments".

Since you don't receive any of your nursing home spouse's income, you could file as "Married Filing Separately".  You would then prepare a Married Filing Separately return for your your spouse. 

Usually Married Filing Jointly has the most tax breaks - here is a great resource with more information:

Married Filing Jointly vs Separately

Try it both ways  to see which is most beneficial for you - our TurboTax software will figure it out for you!

You are most welcome, Chris1204 - and thanks for joining our event today!

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