W4-P Question

[Justice5002020]

I need help on what to chose on the W4-P. I am married and have one child. My wife is permanently disabled. What is the best way to fill out the W4-P to not have to pay at the end of the year? She receives benefits for her disability. 

[johnd84]

Hi there, great question! Could you tell me what is the source of the disability payments? Is it Social Security?

Editing my reply as I did not know a colleague was also working on this. I agree with her, please see her post below.  

[Cindy4 · Accepted solution]

Hi Justice5002020!

This TurboTax W-4 calculator can assist:

https://turbotax.intuit.com/tax-tools/calculators/w4/?srqs=null&cid=ppc_gg_nb_stan_all_na_sitelink-c...

Looking at the form, if step 2 item (b)(i) is blank, and if you only have this one pension, you are prompted to complete steps 3 through 4(b).  The more allowances you claim, the less tax will be withheld.   Another alternative is, if you are currently receiving periodic payments, take a look at the current withholding and divide it by the distribution.  If this percentage is in line with what your tax rate is based on these tax brackets, you may not need to make a change.

https://turbotax.intuit.com/tax-tips/irs-tax-return/current-federal-tax-rate-schedules/L7Bjs1EAD

You'll also want to check with your state to see if they will tax your pension.  States vary, and if they tax pensions, you're plan administrator should be able to withhold for the state as well.

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[Justice5002020]

Yes it is social security. 

[Justice5002020]

It is in KY and they don’t withhold state taxes on the pension.