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W-4 questions

1) I will be starting a summer job next week.  I have two kids under 17.  I don't necessarily want the max pulled out as we need the income right now.  We've used the IRS Tax Withholding Estimator tool and that seems to work well.  Should I not have any taxes taken out of the summer job and just use the IRS tool after the summer to figure out what we need to adjust?  If so, what would I put on the W-4?

2) With my regular job, I adjusted the W-4 to take off my two kids, but nothing changed income-wise.  They said it was due to my income bracket.  Is that true?  If so, can you explain that to me?

3) My husband's job is going to a variable income plan, with the possibility of making more based off of production.  It's not a bonus plan, where it would be taxed at a bonus rate; it's a salary plan.  How should we do the W-4?  Just use the IRS estimator tool every few months to adjust for it?

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2 Replies
LoriLeighEA
Employee Tax Expert

W-4 questions

The "Multiple jobs or spouse works" section of the W4 is for taxpayers who work multiple jobs or are married filing jointly and both are employed. To be accurate, both spouses should fill out a W4 for each job - even that summer one you are starting soon. 

 

The form lists three ways you can complete this section:

  1. The most accurate option is using an online estimator like TurboTax’s W-4 withholding calculator.
  2. You can also use a worksheet to calculate this information.
  3. Or, you can check the box for step 2(c) for both jobs if there are only two jobs total and the earnings are fairly similar.

Yes, your "income bracket" does determine how much is taken out of your pay for withholding. To be accurate, you would need to all income on your W4 - which would include your summer job and your spouse's income.

 

If you make a change in the middle of the year, it's wise to fill out a new form at the beginning of the next year. The adjustments made may result in incorrect results if enacted for a full tax year rather than just part of a year. For a more detailed explanation see this link:  Form W4 and Take-Home Pay

 

Yes, it would be very smart to check the IRS calculator quarterly to make sure you are withholding enough. You can always make additional payments directly to the IRS if your current withholding amounts are not enough based on your spouse's variable income plan. Make a Payment.

 

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ShannonDuff
Employee Tax Expert

W-4 questions

  1. That is great that you have used the TurboTax Withholding Estimator Tool as it will give you the most accurate amounts for your desired resolution when it comes to tax liability at the end of the year.  If your happy with the amount determined using your first job for your withholdings in calculating your overall tax liability for the year, you can use option 2(b) on the w-4 for your main job. By using the table this will account for both jobs. For the summer job's w-4 you should enter EXEMPT on line 4c.
  2.  I you took off the dependents on the w4 estimator and nothing changed, your correct this usually means your still in the same tax bracket. So weather or not you add in the deduction you would get for your dependents it still leaves you in the same bracket. Example: Income is 50,000 for MFJ, you have a standard deduction of 29,200 and 2 dependents under 17. This equates to 50,000-29,200=20,800 now subtract the possible 2,000 per dependent under 17 (the income is below the phaseout for this credit) 20,800-4,000=16,800   If there are no other deductions or credits then you end up with taxable income of 16,800 which leaves you in the 10% tax bracket. You add back in the amount taken out for the dependents and you are still in the 10% tax bracket. https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024
  3. If your husbands job will be variable income then yes it is best to check the withholdings and make adjustments every few months as the income changes. Best way to do this will be using the Estimator tool and his last pay stub. You would adjust the W4 by adding an additional amount if needed. The estimator tool will show you what to add to the W4.
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