How should I adjust my W4 so we get more throughout the year?

I'd like to adjust my W4 so we get it more throughout the year.  We're a family of four and I'm already claiming 3 on my W4 but I don't want to go too high and have to pay in.  I do have the option "Married, but withhold at higher Single rate" checked so should I change this to just Married or possibly move the allowances up to 4?  Or Both?

There is a worksheet on the W-4 itself. Also, your tax program might have an option to do it -- after you do your tax return you can then do this W4 calculator and it will tell you how many exemptions to claim.

I looked at publication 15 and found that for federal each exemption reduces your income by about $300 a month. So if you are well into the 25% bracket ($34,500 ? $83,600 for single people) then each exemption will save you about $75 a month. Which is $900 per year. So if you get back $3000 from IRS you should claim 3000/900=3.33 more exemptions.

It's good to owe the IRS the larger of $1000 or 10% of your tax bill every year. There is no penalty. Though there could still be a penalty if you owe less than a $1000 in some rare cases. Just be disciplined enough to not spend the extra money during the year, and set it aside earning interest.

I'd like to adjust my W4 so we get it more throughout the year. We're a family of four and I'm already claiming 3 on my W4 but I don't want to go too high and have to pay in. I do have the option "Married, but withhold at higher Single rate" checked so should I change this to just Married or possibly move the allowances up to 4? Or Both?

You can use the form to help get closer to the right number, or you can adjust this way. Look at your 2010 return and determine your marginal rate. Say it's 25%, for example. If "a few thousand" is $3000, you want tax withheld on $12,000 less income. An exemption is like saying (in

I'd not make 2 changes at once, maybe first fix your status, see result in paycheck, then fix exemptions next pay period.

You can always go back and "add additional $x per pay period" to tweak further.

Joe

There's a calculator on the IRS webpage that will help you to determine how to set your W-4 correctly.