Since you have multiple sources of income, you could choose to take out taxes from your pension or your social security to make up the difference. In order to change your W-4 for your employer, you can fill it out at the job or complete one in TurboTax, print it out and give it to the employer.
Adjusting your tax withholding isn't difficult. All you need to do is fill out a new Form W-4 and give it to the correct department at your employer. Most often, this is the human resources or payroll department.
The Form W-4 only requires you to fill out a few lines of information and tax withholding calculators can help you figure out what to input on each of those lines. To use it, you'll need to know some basic information about your tax situation. These factors typically include:
- filing status
- number of dependents you plan to claim on your return
- age of those dependents
- information about pay from jobs
- pension income
- contributions to tax-advantaged accounts such as 401(k)s, HSAs, FSAs, IRAs
- adjustments to income such as student loan interest paid
- whether you take the Standard Deduction or itemized deductions
- any tax credits you take advantage of
- other sources of income and tax payments
When reviewing the last item in the list — other sources of income — be sure to consider investment income such as:
- interest
- dividends
- capital gains
- rental income
- alimony
These are not usually subject to withholding but most likely affect the amount of tax that you have to pay, and so reporting it on your W-4 could be beneficial.
The required information can usually be found on your prior year's tax return or your current pay stubs. You'll need to make adjustments for changes from the previous year to make sure it reflects your current situation.
Once you complete the form, give it to your employer. Then, keep a close eye on your next few paychecks to see how the changes impacted your federal income tax withholding.
- 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.
- Filling out a new Form W-4 at the beginning of the year should put you on track for the future.
If you don't know whether you'll likely receive a refund or owe money, TurboTax’s tax withholding calculator can help you figure out what to expect. Then, you can decide if you need to fill out a new Form W-4.
See this help article with video and this tax tips article for further instructions.
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