The Ongoing New Financial Era Thread

hbendle
Posts: 197
Joined: Mon Aug 21, 2017 11:48 am

Re: The Ongoing New Financial Era Thread

Postby hbendle » Tue Mar 12, 2019 11:32 am

To follow up on that cluster-f, should I then:
1. Choose the "married but withhold at single rate"
2. withhold additional specific $ instead?
3. both?
I don't have much experience with this. In retrospect probably should have chosen #1 since we are both working full time, I guess?

Blue&White
Posts: 3199
Joined: Sat Aug 12, 2017 10:01 am

Re: The Ongoing New Financial Era Thread

Postby Blue&White » Tue Mar 12, 2019 1:00 pm

It would help some if I knew ~how much you are paying. But, as a general concept, here are some ideas:

1. check your deductions. Many people take extra deductions due to the refunds they were getting. So, back when I lived in NJ I filled out my W2 so I took deductions for 7 people, despite there only being 4 of us. I did that because between my state and local taxes and my mortgage interest I was getting like $10k back a year in refunds. So, I upped my deductions and cut that down a bit. If you are taking extra deductions, scale that back. And, if you are taking for just the number of people you have, scale it back anyway. So, if you are taking 4, maybe scale it back to 2.

2. have extra money withheld from your paycheck for taxes. This is also something you can do with your W2. You fill a new one out and it gives you the option to have extra money taken out for tax purposes. One thing you can do is not mess with your withholdings, take the amount you owe and divide that by the number of pay period for a year (I assume 24) and have that much withheld each pay check - problem solved.

3. Send in estimated quarterly taxes every quarter. That way you don't have to do a W2 again. You can pay these online with the IRS. Just keep track of them.

#3 honestly may be the easiest. I'm not sure changing how you file is going to solve your problem. Usually married filing jointly gets you the best return. And, it's all about what you withhold during the year vs. how you file at the end. You just need to withhold more along the way is all.
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psu_dad
Posts: 1891
Joined: Sun Aug 13, 2017 6:59 pm

Re: The Ongoing New Financial Era Thread

Postby psu_dad » Tue Mar 12, 2019 1:29 pm

Based on the check I have to send the IRS this year, I figured I needed to have about $100 more withheld from each paycheck. I tweaked my withholding by filing a new w-4 with my employer. I kept the allowances as they were before (2) but I specified that an additional $100 should be withheld from each paycheck. The w-4 allows you to do that.
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