W4 withholding advice

[tanneky]

Hey guys! New here but a long time lurker. Just had an idea on my w4 withholding and wanted to see thoughts and opinions on it.

Little background.

I am in a sales position where I make base hourly rate as well as commission. My base pay is paid biweekly and my commission is paid the last Friday of each month. About half of the year they can fall on the same day. I counted 32 pay days in the 2014 calendar year. My commission is taxed as a bonus at 40%ish which is a normally a decent chunk of money. I am currently in about $9000 of credit card debt from my young and dumb years right after high school. 25 now.

My 2013 federal taxes paid were $5800

I am estimating my 2014 federal taxes owed to be $7000

My idea; claim the maximum exemptions on federal but have a set amount taken as an additional withholding each pay check. The set amount being $7000 / 32 pay checks = $219

The idea is to free up that bloated tax amount on my commission check to pay off debt quicker. Federal taxes on last commission check was $900. So being somewhat fixed would have freed up approximately $650 for debt without compromising my tax liability.

Thoughts? Is my logic even correct? Thanks in advance!

[wjcalderon]

Before you do this, you need to check with someone in your payroll department.
Most companies tax commissions and bonuses as "supplemental income." It's a percentage (25% for federal withholding) and would not be affected by your W-4.

In other words, in the situation you're considering, you would have $7000 deducted from your regular salary PLUS 25% of your commissions.