How to adjust W4 to take less taxes out?

Submitted by Mekaiyo t3_1283pnu in personalfinance

How to adjust W4 to take out less taxes?

Hello everyone, I believe I am getting to much taxes taken out of my paycheck because my refund was more than expected.

I did the IRS withholding calculator and got some numbers to expect a $0 return, but where do I put those numbers on the W4 form to take less taxes out? It seems like the fields are to take more taxes out.

On my Workday portal, I have an option to calculate pay checks based on different tax scenarios but can’t seem to get it right. When I change my withholding amounts my paychecks stay the same or either decrease even more.

The ultimate goal is for me to get more money each paycheck, rather than getting a refund at the end of the year.

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Werewolfdad t1_jeh2qz4 wrote

The irs calculator gives you a form to use

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Mekaiyo OP t1_jeh34fb wrote

I understand that, just didn’t know where to input the number on the W4 form. For example if they said to get a $0 return, I need to change my numbers by $200

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Werewolfdad t1_jeh3nsy wrote

You don’t input numbers on the w4. The irs calculator gives you a pre-filled w4 at the end.

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jokerfriend6 t1_jeh2jgk wrote

Increase the number of dependents to have less taxes taken out. I would increase it by one and see how the year ends up.

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Mekaiyo OP t1_jeh2oik wrote

I thought you had to actually have a dependent to do that? I’m sure if the projected pay matches what the IRS calculator says then it should be close

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jokerfriend6 t1_jeh4dtq wrote

No you don't. Its only for filing you have to be accurate. Its always best to get a refund vs pay. My Salary and income varies quite a bit. But increasing your dependent by 1 will help, and add or subract each year depending on how much you need to pay or get back. If you have not enough taken out you could get penalized. I always shoot to get back $1000.

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StuffinYrMuffinR t1_jeh50gc wrote

Oweing or refund come April 15th is more of a personal preference and circumstance.

Several of our clients basically ignore estimates and pay a fat check at the end of the year because they have such a high RoI that they come out ahead paying penalties and interests.

The average Joe should take your advice and aim for a refund under 1k

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wijwijwij t1_jeh3456 wrote

Step 3 is where you put a dollar amount for the amount less tax you want taken across a full year.

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Mekaiyo OP t1_jeh37tk wrote

Ahhh that makes sense, I just used my HRs calculator and looks like my paychecks increased by $100

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wijwijwij t1_jeh3fgb wrote

The W-4 subtitle makes it seem like that line is just for people who have dependents (child tax credit), but the instructions say you can use it for other purposes, such as your idea of getting your withholding to be more accurate.

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Mekaiyo OP t1_jeh3px6 wrote

Awesome thank you so much! This is what I was looking for! Hopefully I don’t owe the gov next year! So basically if the IRS calculator says I need to withhold $200 each pay check, I do $200 X 26 = $5200 for the yearly amount?

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wijwijwij t1_jeh4m6c wrote

No; putting 5200 will withhold 200 more each paycheck than the NORMAL withholding on a paycheck. Not a total of 200 per paycheck.

So you may need to see by how much you overpaid this year, and use that figure.

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