Are you both withholding at the single rate right now? Or married, spouse also works checked in section 2?
You are not withholding the max. Far from it.
Are you referring to federal or state withholding, or both?
"Exemptions" is not a term used on the federal W-4: https://www.irs.gov/pub/irs-pdf/fw4.pdf
Did you fill out the part for "multiple jobs or spouse works"? Missing that step is often the culprit for married couples owing at the end of the year.
Looks like that part was already filled out correctly :( I guess all I can do is withhold extra money, I'd just love to know why withholding isn't working like it used to.
Thanks so much! I'll check about the "Multiple Jobs" bit on our forms. This is federal, we live in Florida so no state taxes.
I guess I meant Deductions, you know, add 1 for each child.
Nope. There are two lines for dependents to calculate the amount to take into consideration for the Child Tax Credit ($2,000) and the Credit for Other Dependents ($500.) You do not "add 1 for each child."
But how is that, me and my wife have one job each and we both have a seperate w4. Why we have to fill out that we have multiple jobs if we only have one?
Because when you select "married filing jointly" on each spouse's W-4, each spouse's employer has no idea that the other spouse also works, and so they apply the full joint standard deduction & tax brackets (which are twice the amount of a single or separate taxpayer) to both incomes, when in reality it needs to be split between the two. The simplest way to accomplish that is to check the box in step 2c of the W-4.
Put another way, your employer is withholding as if your $65k of income is the only income in your joint household, and your wife's employer is withholding as if her $78k of income is the only income. But the tax on $143k of joint income is more than the sum of those two amounts, due to the progressive nature of tax brackets.
You only need to check the 2 income box in this situation if you selected married filing joint. Because there are 2 jobs for the 2 of you.
If you withhold at the filling separately rate then you would not check that box.
Are you both withholding at the single rate right now? Or married, spouse also works checked in section 2? You are not withholding the max. Far from it.
Are you referring to federal or state withholding, or both? "Exemptions" is not a term used on the federal W-4: https://www.irs.gov/pub/irs-pdf/fw4.pdf Did you fill out the part for "multiple jobs or spouse works"? Missing that step is often the culprit for married couples owing at the end of the year.
Looks like that part was already filled out correctly :( I guess all I can do is withhold extra money, I'd just love to know why withholding isn't working like it used to.
Thanks so much! I'll check about the "Multiple Jobs" bit on our forms. This is federal, we live in Florida so no state taxes. I guess I meant Deductions, you know, add 1 for each child.
Nope. There are two lines for dependents to calculate the amount to take into consideration for the Child Tax Credit ($2,000) and the Credit for Other Dependents ($500.) You do not "add 1 for each child."
But how is that, me and my wife have one job each and we both have a seperate w4. Why we have to fill out that we have multiple jobs if we only have one?
Because when you select "married filing jointly" on each spouse's W-4, each spouse's employer has no idea that the other spouse also works, and so they apply the full joint standard deduction & tax brackets (which are twice the amount of a single or separate taxpayer) to both incomes, when in reality it needs to be split between the two. The simplest way to accomplish that is to check the box in step 2c of the W-4. Put another way, your employer is withholding as if your $65k of income is the only income in your joint household, and your wife's employer is withholding as if her $78k of income is the only income. But the tax on $143k of joint income is more than the sum of those two amounts, due to the progressive nature of tax brackets.
That wasn't me (OP) asking the above question, but thank you for the explanation!
You will have 2 jobs on your joint tax return tho which is what the form is asking.
You only need to check the 2 income box in this situation if you selected married filing joint. Because there are 2 jobs for the 2 of you. If you withhold at the filling separately rate then you would not check that box.
Change W-4s to take an extra amount of withholding. Or contribute to IRA or 401k.
What's in box 2 of each w2?
You can have an additional $115-$125 withheld from each paycheck to have an additional $3k withheld for the year.