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Withholding

I want to change my withholding for state and federal so I have more money in my paycheck without owing money at the end of the year

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1 Reply
JBedford
Expert Alumni

Withholding

Hi, @karenbushika ! The way to achieve that goal is to pay your exact tax liability through your withholding. So for example, if your total tax liability is $20,000, and you're paid 26 times per year, then you would want $769 withheld from each paycheck. 

 

The only problem, though, is it's difficult to know exactly what your tax liability is ahead of time. Often, the best you can do is estimate. A good starting point might be what your tax liability was the year before. This information can be found on Line 24 of your Form 1040. Another possibility is to use our free W-4 calculator

 

A true "zero dollar" return is very difficult to achieve. Personally, I shoot for owing less than $1,000 when I file my tax return. For me, that's a "win", as I've maximized my paychecks throughout the year, then owe a manageable amount (which I've budget for) in April. Hope this helps! 

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