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W-4 Form Question


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Hi there, this is sort of a money management question?  I apologize in advance and let me preface with I'm not asking for tax advice for my own personal finances I'm just trying to figure out how to fill out this new darn form.  I got a new job and my old company was using my old form which still has 8 allowances on it.  I am switching from semi monthly pay to bi weekly and the online calculators for how to fill out this thing are really not helping me... I want to keep my deductions pretty much where they are now but I have no idea how to translate the 8 federal allowances I have now to this new monetary based form.  I did the worksheet... but I think its giving me like a number to break even and I generally like to owe them money each year and just pay it at tax time.  

I saw there is a "computational bridge" method out there which the IRS released to allow employers to convert old forms to the "new" form... can I just use that method???  Or is that just for employers?  I am the sole earner in my house, and I can't afford to mess up my paycheck and then not be able to pay my bills.  I even tried to get HR to help me with what type of number goes in this box but they won't help me.  

I know the standard deduction for married jointly is 25,100 ... but if I want them to take LESS from my check, do I put a figure in box 4(b) that is like 30000 or do I put 5000 to indicate that I want 5k more than the standard?  

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My company switched from semi-monthly to bi-weekly 10ish years ago, and the gross pay difference per period wasn't material, so the deductions also didn't change by a lot.

 

Since I haven't changed companies since the late 1800s, I wasn't even aware there was a new form.  Are you supposed to specify a fixed dollar amount per pay period instead of the number of exemptions?

 

If so, how often can you change the deductions? 

 

My employer allows changes every pay period if desired, so I'd probably take an educated guess on the first pay period and then adjust for the second and beyond.  Base your guess on your last pay stub from your former employer and scale it for any salary differences.

 

Edited by cv91915
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Switching pay periods is not the issue. Spouse & I have just gone through this when we had to make a mega-payment to the feds in May. Recent tax changes mean the old "deduction" system for the W-4 are obsolete.  We knew our situation was changing, so we reduced deductions from 4 to 0. But it doesn't work that way anymore. Your employer will let you set your deductions at 0 (or whatever), but now, you have to do the worksheet. If you don't, you will be underwithheld. There has been no publicity about this - it really seems to come into effect when your tax situation changes. Spouses payroll rep was unsurprised, and said a number of other employees had been through the same. Now you have to estimate everything and enter a specific dollar amount to be withheld on the W-4. OP's frustration is solid - it's wack.

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8 hours ago, racer7949 said:

Switching pay periods is not the issue. Spouse & I have just gone through this when we had to make a mega-payment to the feds in May. Recent tax changes mean the old "deduction" system for the W-4 are obsolete.  We knew our situation was changing, so we reduced deductions from 4 to 0. But it doesn't work that way anymore. Your employer will let you set your deductions at 0 (or whatever), but now, you have to do the worksheet. If you don't, you will be underwithheld. There has been no publicity about this - it really seems to come into effect when your tax situation changes. Spouses payroll rep was unsurprised, and said a number of other employees had been through the same. Now you have to estimate everything and enter a specific dollar amount to be withheld on the W-4. OP's frustration is solid - it's wack.

 

What isn't connecting with me is that you have a trail of previous pay stubs that show the result of claiming X exemptions. 

 

Why can't you just take that number and force the worksheet to calculate approximately that amount going forward?  

 

Or more or less depending on how your tax situation has changed?  And then adjust again one pay period later if it's too far off?

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13 hours ago, cv91915 said:

Why can't you just take that number and force the worksheet to calculate approximately that amount going forward?  

 

Yes, you can do that by taking the difference between what the deductions will deduct and what you will need to pay to fulfill your tax obligations and enter that amount on line 4(c) of the W-4.

 

What they did was reduce the value of the deductions. Under the old system, if you had a deduction of 1 it would withhold,  say, $800, and a zero would withhold $1,000. (These are made up numbers just for an example. ) The new system withholds ,say, $500 for a 1 and $800 for a zero.

 

Even with the change, if you are claiming zero (or whatever) and it works for you, you are neither significantly overpaying or underpayment, that's great! These changes won't affect every single tax situation.

 

But for some people,  the withholding amount with deduction zero isn't enough. Since you can't go lower than zero, you then have to calculate the additional amount needed to fulfill the tax obligation and place that amount on line 4(c) of the W-4. You, can use the IRS worksheet to do this, or you can just write in any number that you think works for you, even $0.

 

Everyone's tax situation is different, we had a job change, multiple jobs and income streams, and changed from itemizing to using the standard deduction, pretty much all at once. If you haven't had that much change in your tax situation, all of this discussion may be a non-issue for you. 

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Ok, I guess I was using the wrong term, the IRS calls them allowances:

 

Allowances are no longer used for the redesigned Form W-4. This change is meant to increase transparency, simplicity, and accuracy of the form. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.

 

Here is the info straight from the IRS.

 

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