Plugged in my final form last night. Getting 500 back from federal and a 3500 state.
I can’t do much about the state refund to lower what my employer withholds. I try to manage federal to +- 1k by adjusting my withholdings after bonuses are paid, so this is about as good as I can do. I’ll take another look through later and submit everything.
Do you not have a state equivalent of a W-4?
It does, but I have a big itemized deduction that tends to break what the W-4 can can calibrate.
This might have actually changed since the last time I filled it out, so maybe I can fix it now.
On the federal W-4 you can complete a worksheet with your itemized deductions and some other items of significant impact and it will give you the number of allowances. Or you can research how many dollars each allowance is worth and adjust manually. (If each allowance is, say, $650 then a $3,500 refund would equate to increasing your allowances by 5.)
Obviously I’m not sure what options you have on your state’s form, but I’d be pretty surprised if you couldn’t increase your allowances or something similar.
You can, but depending on the state’s rules and your situation, it may not have much of an effect. 99 dependents (the max) in my state won’t get me owing.
Dependents <> Allowances
Thought I had filed my amended return, but the IRS only shows the original. Just submitted the amended one tonight.
Yeah, i went from needing 6 to needing 20 allowances on the state form, which i could put in, but anything after 10 or 12 had no impact on the withholding. Basically, the state only calculated the tax tables up to that point for companies to use in their pay system.
Ah, I can see that. Many withholding rules have a caveat “for each additional allowance reduce withholdings by ($650 / 26 =) $25 per pay period”. Whether your employer’s payroll company’s software vendor bothers to code that in is a different question.
It’s been a while since I looked at any of this - I did not see such wording at the time otherwise I would have mentioned it to payroll.
Bonuses are underwithheld at the federal level so I am usually trying to get that caught up and this gives me a bit of a cushion overall.
Both the federal and my state’s W-4 have a spot where you can specify an actual dollar amount to increase / decrease your withholding.
Spot-checking other state W-4’s, it does look like many states only have a spot for “additional withholding”…but I wonder if the payroll systems would accept a negative number.
I asked our HR if I could just calculate the amount of tax I anticipate paying and pay a flat amount per paycheck.
My reasoning was, I’m allowed to request additional withholding and I’m allowed to have 99 exemptions, so can I instead just pay a proportional amount of my tax burden?
Nope, not allowed.
I asked if it’s allowed to take 99 exemptions and then request additional withholding for the amount of tax I expect to owe.
That’s allowed, but I don’t want to be audited. I’m also not sure if the math really works out properly.
All the IRS cares about is getting their money. They couldn’t care less how you fill out your W4 if it results in a reasonable amount of tax being withheld relative to your tax liability.
Try doing 99 allowances for one pay period and see if that knocks your withholdings to $0. Then figure out what you need to withhold for the rest of the year and divide by the number of pay periods remaining.
Sorry, was using imprecise language that doesn’t cover all states. My state uses them interchangeably on their equivalent of the w-4 (or at least they did the last time i signed one.). The general point i was trying to illustrate is that not all states have levers that can target your withholding to ultimate taxes owed.
And just to expand on that… it isn’t that they’re going to let it slide. It’s that you’re not doing anything wrong.
Your obligation to the IRS is to have any combination of withholdings and estimated payments that equals your tax liability as of the following dates:
4/15: Jan - Mar income
6/15: Apr - May income
9/15: Jun - Aug income
1/15: Sep - Dec income
Below a certain income you need to withhold or pay estimates totalling the lower of 100% of last year’s liability or 100% of this year’s liability.
Above a certain income that we all probably fall above it’s 110% of last year’s or 100% of this year’s.
The W4 is a tool to aid in having HR withhold a reasonable amount. You can fill it out however you like so long as you’ve met your obligation. You’re not doing anything wrong by saying anything on the form that ends up with an appropriate amount of tax paid.
The non-uniformity of these periods drives my Type A personality nuts, but those are in fact the due dates (3 months, 2 months, 3 months, 4 months).
maybe something to do with avoiding summer vacation
Not sure about the reason, but maybe it’s to have Q3 due before the end of the federal fiscal year.
Trivia – When I was spot-checking the state W-4’s earlier today, I noticed one state (I forget which) has an ominous note on their W-4, to the effect of “if you claim more than 10 exemptions, we are required to report that to the state authorities”.
I assume that as long as the state gets its money at the right times, the state doesn’t actually care, but if you’re a person (like me) who tries to avoid unwanted attention…
