Not sure how to fill out on your IRS Form W4? Everybody’s situation is different, and there is no precise answer.
To make sure you are having the correct amount withheld from your pay, the IRS has developed a withholding calculator designed to help individuals avoid having too little tax withheld.
From the IRS:
If you are an employee, the Withholding Calculator can help you determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.
Who Can Benefit From The Withholding Calculator?
- Employees who would like to change their withholding to reduce their tax refund or their balance due
- Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit)
- Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures
CAUTION: If you will be subject to alternative minimum tax, self-employment tax, or other taxes, you will probably achieve more accurate withholding by following the instructions in Pub 505: Tax Withholding and Estimated Tax.
Please visit www.irs.gov for more information.