Changing Withholding Due To Wife Losing Job

I would back-calculate.

Step 1: Download the 2006 Form 1040-ES (the form for computing and paying estimated tax).

Step 2: Use 1040-ES to estimate your 2006 total federal tax.

Step 3: Subtract out what's already been withheld to arrive at how much more needs to be paid.

Step 4: Divide by how many paychecks you have left in the year to determine how much has to be withheld from each check.

Step 5: Download Publication 15. Go to the section on "The Percentage Method of Withholding", specifically the lists of withholding rate brackets.

Step 6: By trial and error, figure out what number of withholding exemptions results in having withheld the amount of tax you calculated in (4).

Step 7: When your wife starts working again, repeat (1)-(3), then assign to each of you a share of the result in (3), then repeat (4)-(6) for each of you.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

(snipped

(snipped)

That's about 577$ unemployment per WEEK! Which state pays that much?

ChEAr$, Harlan Lunsford, EA n LA Sun Jun 4, 2006

You should read through the instructions for the W4. You can easily pull a copy from

You can't get a numerical answer here, as you've not told us what your deduction are for mortgage/prop tax, other children, etc. To put the reply in gerneral terms, an exemption on the W4 is equal to saying "don't tax $3300". Someone with no mortgage is likely to claim one-three exemptions reflecting their own exemption and standard deduction. Someone with a mortgage may have $10,000 in interest and $5000 in property tax, this might account for 5 (additional exemptions). If you owe at the end of the year you need to drop the number, and confirm (via pay stub) that your ammount deducted for fed tax is enough. The W4 and employer withholdings won't consider large stock gains or other external windfalls. JOE

First, download a 2006 tax calculator from the web and estimate your full year taxes from all the income sources you mentioned. Use your post and last year's 1040 to make sure you include everything. Then subtract all the withholding you have ALREADY had taken from your paychecks. Then divide what's left by the number of paychecks you WILL still receive this year. Fill out a W-4, which has a place to designate a specific amount (instead of number of exemptions), sign it and turn it into your payroll department. Take into consideration when dividing by number of paychecks, how long it'll take payroll to make the change. Actually you only have to deduct 90%, or within $1,000, of actual taxes to avoid a penalty for underpayment. As the year goes on make sure you're on track. You can designate an "extra amount" any time as all withholding can be averaged over the year, but do not pay an installment which cannot be averaged to make up for a past deficiency. ed

The W-4 has no such place on it. What it has is a place to designate a specific *additional* amount of tax to be withheld.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

Isn't it easier just to ask for a specific amount to be withheld in addition to the already-calculated amount? Seth

While the above is true, with regards to the IRS version of the W-4, many companies modify it to include a line for the specific amount of withholding (without regard for number of allowances). At least that is true for W-4P forms (pensions).

Au contraire, mon frere.

Look at the current version of the W4P form which is structured just like the W4. It even says that no additional amount may be designated without specifying first total number of allowances. ChEAr$, Harlan Lunsford, EA n LA