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Sooo frustrated, can someone please help me re: federal withholding?

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    Sooo frustrated, can someone please help me re: federal withholding?

    The company I work for changes payroll companies all the time( this is our 4th in 5 1/2 years). I'm left to try and make sure enough Federal is withheld each time since every time we change payroll companies my take home pay changes. I know the laws are more complex than can be answered here, I just need a very general answer. I gross 938 per week, 889 adjusted gross after health insurance is deducted. I file jointly with DH. His income varies as he is self employeed but it is usually about 55,000 to 60,000 per year. (mine is $49,000 )Around what % of my income ( I should be using the adjusted gross income, correct? ) should I have withheld for federal? I don't want to overpay this year especially since I am trying to get my car paid off and would like that money availble to do that. Thanks in advance for your help.

    #2
    I'm not a withholding expert, but I think you want to know what allowances to claim on your W4. I would suggest the IRS website's withholding calculator, for the first estimate. You might also download the W2 itself and follow the directions, which will likely have you fill out the second page to include deductions you take and so forth.

    Here's the calculator and here's the W4.

    I hope this helps some!
    My other blog is Your Organized Friend.

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      #3
      Thank you. I don't have all of our tax info from last year so wasn't really able to get an answer. I'm not looking for specifics, just an average % that should be taken before allowances.

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        #4
        It depends on your income level, family size/deductions, and many other factors, but if you're in the $60k-$90k range (for the entire household), you can probably go with about 10-12% of your pay and be close. The best way to go, however, is to estimate your annual tax bill, then just divide that by 12. Then all you have to do is make sure you have that particular dollar amount taken out. You should even be able to tell your payroll company "Take out [THIS] much every month"
        "Praestantia per minutus" ... "Acta non verba"

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          #5
          I have my pay stub in front of me. My adjusted gross income is $889 and I have $170 withheld. This is before allowances. Does that sound about right? DH and I file jointly and he is self employeed and pays his taxes quarterly. At the end of the year we've been getting back around $3,000.

          Comment


            #6
            $3000 refund is about $250 per month too much withheld. It is hard to get to zero, but you would rather get as close as possible.

            You might also try this calculator to play around with different withholding allowances to lower the amount you are having withheld. Currently, $170 is 5.2% of your paycheck.

            There is a W4 assistant on the above website, too. The two ways I suggest at the top of the post are your best guidelines, a percentage given by anybody is going to be off because there are so many factors involved.
            My other blog is Your Organized Friend.

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              #7
              Actually, $170 is over 19% of my gross pay

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                #8
                Originally posted by eeyoresmom View Post
                Actually, $170 is over 19% of my gross pay
                Whoops! You are right. Based on getting $3000 back you are definitely having too much withheld. Do you know what withholding allowances you claim on your paycheck?

                My husband claims 9 for withholding purposes, not on our tax return, even though there is just one income and 4 of us in the household. Because we have children and itemize our return we need to have less taken out of our check to avoid a very large refund.
                My other blog is Your Organized Friend.

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                  #9
                  Yes, but how do i know if I am having too much withheld or DH is overpaying in his quarterly payments? I claim 6 dependents and have an additional $70 per week withheld. It took several tries to come up with this formula to have $170 each week taken out.

                  Comment


                    #10
                    Originally posted by eeyoresmom View Post
                    Yes, but how do i know if I am having too much withheld or DH is overpaying in his quarterly payments?
                    If you are filing jointly, it doesn't matter. Either one or the other of you needs to pay less, or you both need to pay less. Any way you work it so that you cut about $250/month off of what you are paying in. To be safe and not end up owing money, if that would pose a problem, maybe cut back by $200/month.
                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

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                      #11
                      Yeah, I'm going to talk to DH tonight. I beleive he pays ESTIMATED quarterly taxes though. Really, I wonder if it would be better for us to file seperately.........

                      Comment


                        #12
                        Originally posted by eeyoresmom View Post
                        The company I work for changes payroll companies all the time( this is our 4th in 5 1/2 years). I'm left to try and make sure enough Federal is withheld each time since every time we change payroll companies my take home pay changes. I know the laws are more complex than can be answered here, I just need a very general answer. I gross 938 per week, 889 adjusted gross after health insurance is deducted. I file jointly with DH. His income varies as he is self employeed but it is usually about 55,000 to 60,000 per year. (mine is $49,000 )Around what % of my income ( I should be using the adjusted gross income, correct? ) should I have withheld for federal? I don't want to overpay this year especially since I am trying to get my car paid off and would like that money availble to do that. Thanks in advance for your help.
                        Presuming 2011 is similar to 2010, you should look at your tax return to find your refund or payment. Whether it is a refund or payment,each exemption on your W-4 is worth approximately the value of one dependent.

                        Comment


                          #13
                          Originally posted by eeyoresmom View Post
                          The company I work for changes payroll companies all the time( this is our 4th in 5 1/2 years). I'm left to try and make sure enough Federal is withheld each time since every time we change payroll companies my take home pay changes. I know the laws are more complex than can be answered here, I just need a very general answer. I gross 938 per week, 889 adjusted gross after health insurance is deducted. I file jointly with DH. His income varies as he is self employeed but it is usually about 55,000 to 60,000 per year. (mine is $49,000 )Around what % of my income ( I should be using the adjusted gross income, correct? ) should I have withheld for federal? I don't want to overpay this year especially since I am trying to get my car paid off and would like that money availble to do that. Thanks in advance for your help.
                          To determine if your company is holding enough federal payroll tax out of your check go to Internal Revenue Service and put withholding tables 2011 in the search box. Look to see if you are single, married, head of household(same ded as married generally), how you are paid, ex weekly, bi-weekly, and how many deductions. This will give you what you need. I have to ask why your company keeps changing? It can be a serious headache to do that. I do payroll for a living and it can be complicated if you are not careful. BTW the filing joint is not the same as your filing status on your paycheck. Generally every year you fill out a new I9 and W4. these tell your employer how to do your payroll taxes.

                          For fun I figured you were deducting married and paid weekly. these are those numbers from the table for your gross. I don't think that your health insurance is tax deductible but I can never remember so I went with your actual gross. $938. Hope this helps. It is on page 41 of publication 15.
                          Keep in mind that getting taxes back can be for a variety of reasons. withhlding too little is only one of them. Even if you withheld the "correct" amount if you had more deductions than usual or something like, or college or student loan interet, etc. that can create a larger return. I personally would rather get money back than pay in! Especially if as you said your dh does estimated tax payments and is self employed. This means that he could be paying in the right amount but because of changes and expenses throughout the year he might have paid too much. Then again, there is always that danger if he doesn't pay in the supposedly correct amount and at the end of the year suddenly has a huge increase due to whatever that can hurt. p.s. I only went up to 7 deductions, I am assuming you dont' have more than 5 kids. If I am wrong check the chart.


                          0 is 101
                          1 is 90
                          2 is 80
                          3 is 69
                          4 is 58
                          5 is 48
                          6 is 37
                          7 is 29

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                            #14
                            Originally posted by eeyoresmom View Post
                            Yeah, I'm going to talk to DH tonight. I beleive he pays ESTIMATED quarterly taxes though. Really, I wonder if it would be better for us to file seperately.........
                            So just lower each estimate by $600. ($200/month x 3 = $600 per quarter).

                            Filing separately will likely just increase your taxes (& make more work).

                            It seems easiest just to adjust your estimates.

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