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Old 03-23-2013, 01:15 PM   #1
silver arrow
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Default Explain tax withholding to me.

I need to withhold about 15% for income taxes from all my sources of income, but can't figure what is actually withheld when you select Single or Married and 0 or 1.

Is the percentage variable based on the amount pay?

I know what I need to withhold as a percentage, but can't figure exactly what to select on my W4.
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Old 03-23-2013, 01:18 PM   #2
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Tar the Tax Man!
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Old 03-23-2013, 01:19 PM   #3
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I think it's variable based on the amount you get paid.

http://www.irs.gov/publications/p505...link1000194347

Easiest way is to just fill it out, making a stab at it, check how much is actually taken out from your paycheck, and fill out another one as appropriate.
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Old 03-23-2013, 01:22 PM   #4
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Quote:
Originally Posted by shikataganai View Post
I think it's variable based on the amount you get paid.

http://www.irs.gov/publications/p505...link1000194347

Easiest way is to just fill it out, making a stab at it, check how much is actually taken out from your paycheck, and fill out another one as appropriate.
Did that last year and ended up 10k short. Don't want to do that again.
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Old 03-23-2013, 02:20 PM   #5
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it assumes your paycheck is pro rated for the year.does not account for dual incomes.
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Old 03-23-2013, 02:28 PM   #6
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Originally Posted by Indocti Discant View Post
it assumes your paycheck is pro rated for the year.does not account for dual incomes.
We have 4 sources of income, my pay, wife's pay, my military retirement, and VA disability, which isn't taxed.

The three taxable sources total 170k.

From our taxes this year, it appears our effective rate will be about 15%.

What do I need to set the 3 W4s at to end up having 15% withheld in federal income tax.

**** they make this difficult.
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Old 03-23-2013, 02:35 PM   #7
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If I remember correctly there's a box in the W4 that allows you to specify a dollar amount you want withheld. Use that instead of the stupid numerical exemptions.

However, there is also an online calculator on the IRS website that's suppose to help you figure out what to do. Not sure if it can take your military retirement into account though.
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Old 03-23-2013, 02:57 PM   #8
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Old 03-23-2013, 03:07 PM   #9
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^^^ I used that and it was pretty darn close. I have my pay, my military retirement annuity and Alaska PFDs. I have VA Disability too but as you already know, it's not taxable income. I ended up using M0 on my pay and have an additional withholding on my pay since there are no witholdings on my MilPay. A little over is better than a lot under.
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Old 03-23-2013, 03:28 PM   #10
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Quote:
Originally Posted by bjcarter2 View Post
^^^ I used that and it was pretty darn close. I have my pay, my military retirement annuity and Alaska PFDs. I have VA Disability too but as you already know, it's not taxable income. I ended up using M0 on my pay and have an additional withholding on my pay since there are no witholdings on my MilPay. A little over is better than a lot under.
I can't change withholding on retirement pay? That's crazy.
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Old 03-23-2013, 03:37 PM   #11
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Can anyone explain why teh wife's federal withholding only comes out to about 9% of income per paycheck? It should be much higher based on her income. Mine is about 30%. Because of this we got a horrible tax bill this year. The IRS calculator estimates a $7500+ deficit for they year if nothing changes. It seems there has to be an error somewhere.

The W-4s are filled out correctly - i.e., claiming 0 on both, married/joint filing, etc.

This **** pisses me off.
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Old 03-23-2013, 05:13 PM   #12
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Quote:
Originally Posted by silver arrow View Post
We have 4 sources of income, my pay, wife's pay, my military retirement, and VA disability, which isn't taxed.

The three taxable sources total 170k.

From our taxes this year, it appears our effective rate will be about 15%.

What do I need to set the 3 W4s at to end up having 15% withheld in federal income tax.

**** they make this difficult.
You're not alone. This is our situation this year too except we only have the 2 sources of income. Use the IRS calc and hope that you don't get dicked over next year.

yay for big checks to the IRS
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Old 03-23-2013, 05:30 PM   #13
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Quote:
Originally Posted by Integra96 View Post
Can anyone explain why teh wife's federal withholding only comes out to about 9% of income per paycheck? It should be much higher based on her income. Mine is about 30%. Because of this we got a horrible tax bill this year. The IRS calculator estimates a $7500+ deficit for they year if nothing changes. It seems there has to be an error somewhere.

The W-4s are filled out correctly - i.e., claiming 0 on both, married/joint filing, etc.

This **** pisses me off.
Claiming 0 is not "correctly" if you don't want to pay at the end of the year.
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Old 03-23-2013, 05:34 PM   #14
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Quote:
Originally Posted by richde View Post
Claiming 0 is not "correctly" if you don't want to pay at the end of the year.
I thought that claiming 0 would maximize withholding?
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Old 03-23-2013, 05:39 PM   #15
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Quote:
Originally Posted by Integra96 View Post
I thought that claiming 0 would maximize withholding?
Sorry, sorry, sorry...I was thinking of something else. It's been a while since I messed with withholding.

Is her employer deducting like it should?

Employer withholding tax tables here:
http://www.irs.gov/pub/irs-pdf/p15.pdf

Last edited by richde; 03-23-2013 at 05:49 PM.
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Old 03-23-2013, 05:40 PM   #16
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Quote:
Originally Posted by Integra96 View Post
I thought that claiming 0 would maximize withholding?
It does. You also need to look into withholding more if you are married, both work and make more than a certain amount.
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Old 03-23-2013, 05:43 PM   #17
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Quote:
Originally Posted by pityr View Post
It does. You also need to look into withholding more if you are married, both work and make more than a certain amount.
What I'm saying is, my paycheck seems to be taxed at a perfect amount for what I make. My wife's is taxed like she makes minimum wage. It doesn't make sense and shouldn't have anything to do with being married or having a certain income.
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Old 03-23-2013, 05:48 PM   #18
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She should probably talk to her payroll department and see whats going on.
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Old 03-23-2013, 06:01 PM   #19
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Another option, if you're raking in $170k a year is to withhold nothing and setup an automatic transfer to an interest bearing account equal to what you would normally have withheld. Then come tax time, use that money to pay your taxes.

You keep the interest earned. At 15%, a 10 second (wrong) calculation could be $25k a year tax liability.
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Old 03-23-2013, 06:06 PM   #20
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According to the IRS tables the withholding is correct. I don't ****ing understand this.
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Old 03-23-2013, 06:21 PM   #21
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Quote:
Originally Posted by Integra96 View Post
Can anyone explain why teh wife's federal withholding only comes out to about 9% of income per paycheck? It should be much higher based on her income. Mine is about 30%. Because of this we got a horrible tax bill this year. The IRS calculator estimates a $7500+ deficit for they year if nothing changes. It seems there has to be an error somewhere.

The W-4s are filled out correctly - i.e., claiming 0 on both, married/joint filing, etc.

This **** pisses me off.
Does she make significantly less money than you do?

IE you make 100k/yr and are taxed at 30%. Checking Married 0, the government assumes your spouse is in the same tax bracket. Meanwhile she makes 20k/yr and the government assumes you are in her lower income 10% bracket. They aren't factoring in your affect on each others taxes, aka the marriage penalty.

That's just a guess, but I think it's a pretty good one.
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Old 03-23-2013, 06:26 PM   #22
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Quote:
Originally Posted by scaryfastskier View Post
Does she make significantly less money than you do?

IE you make 100k/yr and are taxed at 30%. Checking Married 0, the government assumes your spouse is in the same tax bracket. Meanwhile she makes 20k/yr and the government assumes you are in her lower income 10% bracket. They aren't factoring in your affect on each others taxes, aka the marriage penalty.

That's just a guess, but I think it's a pretty good one.
She makes about 50% of what I do - I guess that could be it. The the only solution would be to withhold additional money on each paycheck on the W-4 to make up the difference, I assume.
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Old 03-23-2013, 06:35 PM   #23
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Quote:
Originally Posted by Integra96 View Post
She makes about 50% of what I do - I guess that could be it. The the only solution would be to withhold additional money on each paycheck on the W-4 to make up the difference, I assume.
I *think* so. My fiancee had to do that because her withholdings are consistently low. Mine have always erred slightly over, but even enough to be acceptable to me.
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Old 03-23-2013, 06:37 PM   #24
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Anyone got any tips about for what to do about changing my withholdings when I get married? We are both in the same tax bracket, though near opposite ends of it.
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Old 03-23-2013, 06:53 PM   #25
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Quote:
Originally Posted by scaryfastskier View Post
Anyone got any tips about for what to do about changing my withholdings when I get married? We are both in the same tax bracket, though near opposite ends of it.
Post #8, foo
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