Help me adjust W4 for 2012

[NotSoFair]

Hi all,

My current W4 has 6 personal allowances and I think too much tax is being withheld. I would like to adjust it for 2012. But I don't know how many allowances would get me to the right withholding amount.

Here're the figures.
Gross salary: $87,000
Expected AGI: $64,608
With MFJ and a child as dependent, taxable income will be (using 2011 deductions): $41,908 and tax will be $5,439. I get education credit of $2,500, so the net fed tax will come down to $2,939. Accordingly how many personal allowances should be there on W4? I get paid twice a month.

Also, is W4 used only for fed tax calculations? Or is it also used for state tax?

Thank you for helping.

[mwcpa]

"how many personal allowances should be there on W4"
try this....

www.irs.gov/individuals/article/0,,id=96196,00.html
or
www.yourmoneypage.com/withhold/fedwh1.php

"is W4 used only for fed tax calculations? Or is it also used for state tax?"
generally, yes. many states have their own "equivalent"

[NotSoFair]

Thank you.

I had tried the IRS calculator before posting here, but it asks for withholding amount so far this year. I had only worked a few months this year. Next year will be a whole year and I will be contributing to 401(k), so that was not an orange-to-orange comparison. May be if I try again after Jan 15th, I will get a better picture.

The calculation by the other link was not at all realistic.

Thanks anyway. I will wait until after my first pay check in '12.

[Deleted]

In your case I think I would suggest filling the form for a specific $ amount to be withheld per paycheck instead of using the allowances. Then check info again at the end of March to make sure you are withholding sufficient, but not too much.

I can never get the IRS quick form to result in the right figure - it way over withholds if I use what it suggests.

[NotSoFair]

Dec 12, 2011 19:28:29 GMT -5 @rockit said:

In your case I think I would suggest filling the form for a specific $ amount to be withheld per paycheck instead of using the allowances. Then check info again at the end of March to make sure you are withholding sufficient, but not too much.

I can never get the IRS quick form to result in the right figure - it way over withholds if I use what it suggests.

That would work, but then I am not sure how the employer would figure out the State withholding amount.

After reading IRS Pub 505, I have a better understanding out how to include the education credit and other deductions on the W-4 worksheet. Hopefully that will work.

Thanks.

[gavinsnana]

This is the first year I have no dependents. Not able to claim daughter, outta college, on her own..

I got my last check and did a quick estimate with the IRS calculator and I am breaking even, which is what I want.

I would rather break even than get back and not have the IRS hold my money all year. So, I don't think I need to change deductions unless 2012 will be different.

Anyone know?

[NotSoFair]

Dec 29, 2011 21:10:41 GMT -5 gavinsnana said:

This is the first year I have no dependents. Not able to claim daughter, outta college, on her own..

I got my last check and did a quick estimate with the IRS calculator and I am breaking even, which is what I want.

I would rather break even than get back and not have the IRS hold my money all year. So, I don't think I need to change deductions unless 2012 will be different.

Anyone know?

If it is breaking it even and that's what you want, I suppose you don't have to change anything.

[NotSoFair]

I updated my W4 (increased the number of allowances from 6 to 11 using the calculation worksheet) and federal withholding came down from $314 to $198, but state tax withholding only dropped by about $6 (from $217 to $211). They are deducting too much for state tax. What should I do now? Can I keeping increasing the number of allowances until I get the correct withholding?