Deleted
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Post by Deleted on Apr 9, 2019 18:52:56 GMT -5
Was 8 wrong? I've found the calculator to be pretty accurate. I'm guessing it is. I've never been anywhere near that before. But it's using both of your incomes/withholding to figure the closest to 0, so it might be for example that you both claiming 2 withholds too much, but your husband claiming 1 and you 8 is closer, especially if there is a big income discrepancy. I used to obsessively try to keep withholding to exactly what we owed so I spent a lot of time with that calculator. Now it doesn't matter so I haven't really used it much in the past few years and don't pay as close attention to what it's kicking out.
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Lizard Queen
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Post by Lizard Queen on Apr 9, 2019 19:16:17 GMT -5
It was wrong for us before the new tax law, when were dual income. We didn't save much from the new tax law, whatever the potential income we put in. Our incomes are more unequal now, but not that unequal if you consider all the payroll deductions my DH does (HSA, etc.). We have never itemized, so it's not that.
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Apple
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Post by Apple on Apr 9, 2019 19:18:08 GMT -5
I just wish I was given an option to pay a percentage of my gross pay. I have a nice, easy base pay, but overtime/holidays can cause that to increase quite a bit, and I don't care for how taxes are handled for that on my paycheck. If it's closer to the end of the year, and I've worked a lot of overtime, I could just increase the percentage for the last few months (I've done some adjusting by changing the amount I contribute to retirement, but I'm pretty close to maxing now, so there is less play room there).
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Miss Tequila
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Post by Miss Tequila on Apr 9, 2019 19:23:28 GMT -5
If you dont want to tell your employer about your extra jobs, you can either add an amount, or have your other job withhold at a very high rate. I dont know how much your side hustles are earning, but worst case scenario, you are under withheld and will owe some money in April. Or just make quarterly estimates. Not that big of a deal
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teen persuasion
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Post by teen persuasion on Apr 9, 2019 21:56:17 GMT -5
Not sure how I feel about this... I'm not really sure I want to tell my employer about all my sources of income so they can withhold the correct amount... Here's the skinny: "The agency plans to release a new W-4 form that better incorporates the changes ushered in by the new tax law so that the amount held back for taxes in each of your paychecks is more accurate. The agency’s goal: A taxpayer shouldn’t owe or be owed come tax time.""Instead of claiming a certain amount of allowances based on exemptions – which have been eliminated – the draft form asked workers to input the annual dollar amounts for: Nonwage income, such as interest and dividends Itemized and other deductions Income tax credits expected for the tax year For employees with multiple jobs, total annual taxable wages for all lower paying jobs in the household “It looked a lot more like the 1040 than a W-4,” Isberg says. " What do you think about it? www.msn.com/en-us/money/taxes/the-irs-is-changing-paycheck-withholding-and-itll-be-a-doozy/ar-BBVL5zL?li=BBnb7KzIf they don't want to owe me a big refund, they have to create negative withholding. DH and I have zero federal withheld, and get thousands in refundable credits as long as we have kids at home. That's the way EITC and CTC and AOTC are designed. They just increased the refundable portion of CTC in the tax reform, to replace the value of the personal exemptions they eliminated.
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jkapp
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Post by jkapp on Apr 10, 2019 8:41:08 GMT -5
I just wish I was given an option to pay a percentage of my gross pay. I have a nice, easy base pay, but overtime/holidays can cause that to increase quite a bit, and I don't care for how taxes are handled for that on my paycheck. If it's closer to the end of the year, and I've worked a lot of overtime, I could just increase the percentage for the last few months (I've done some adjusting by changing the amount I contribute to retirement, but I'm pretty close to maxing now, so there is less play room there). If you make friends with your payroll providers, then you can ask them to mark a box in the payroll software to "not calculate income tax" and then just withhold a set dollar amount. That's what I do. You have to be good at determining how much tax you will owe (which is basically what the new W4 form would be doing), but if you don't have a complicated tax return, it's really easy to estimate tax.
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bookkeeper
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Post by bookkeeper on Apr 10, 2019 12:04:15 GMT -5
I track our effective tax rate from year to year and make sure our federal withholding is the corresponding percentage. Our effective tax rate has been between 12% and 15% for years.
Our retirement income is pulled from a 401K at this point. The plan administrator automatically withholds 20% for federal taxes. That additional withholding covers our other income sources.
We funded a 401k account and a HSA account to keep our income down while working. We tried to keep our money working for us rather than being owed to the taxman.
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Apple
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Post by Apple on Apr 10, 2019 14:36:34 GMT -5
I just wish I was given an option to pay a percentage of my gross pay. I have a nice, easy base pay, but overtime/holidays can cause that to increase quite a bit, and I don't care for how taxes are handled for that on my paycheck. If it's closer to the end of the year, and I've worked a lot of overtime, I could just increase the percentage for the last few months (I've done some adjusting by changing the amount I contribute to retirement, but I'm pretty close to maxing now, so there is less play room there). If you make friends with your payroll providers, then you can ask them to mark a box in the payroll software to "not calculate income tax" and then just withhold a set dollar amount. That's what I do. You have to be good at determining how much tax you will owe (which is basically what the new W4 form would be doing), but if you don't have a complicated tax return, it's really easy to estimate tax. All ours is online. I could do a set dollar amount, I think, but then I'd have to readjust it more frequently depending on overtime. I went from no overtime all year, to being scheduled for 97 hours of overtime in a 20 day span, to having the last 24 hours canceled the day before I was supposed to work them. A percentage would work out much better for me.
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movingforward
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Post by movingforward on Apr 11, 2019 11:23:57 GMT -5
I don't see this going over well with the general population. YM is different...most of us here prefer to get whatever money in our paychecks rather than at the end of the year. We stick it into taxable accounts, IRA's, emergency funds, etc. We know it is more useful to us now rather than getting a big lump sum later; however, most people are not like YM. Aside from the overall privacy issues, it appears (at least to me) that a lot of people look forward to that large check from the government each year. They use it to make big purchases, take vacations, etc. Disperse that sum of money into their check 26 times a year, or whatever, and it just gets spent eating out, going to Starbucks, etc.
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giramomma
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Post by giramomma on Apr 11, 2019 12:20:11 GMT -5
I was waiting for everything to settle out before we started messing with our withholding, both in terms of understanding really how the new tax laws affect us, to the political climate.
I may start looking at things to get a smaller refund...and then again I may not. There's only so much I can keep up with right now.
I also really don't care about giving the gov't a large loan for a year. Interest rates what they are, and given that Trump is also now trying to politicize the fed such that they will bend to his will...well, we're not seeing interest rates of the 70s and early 80s any time soon.
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tallguy
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Post by tallguy on Apr 11, 2019 13:40:41 GMT -5
I was waiting for everything to settle out before we started messing with our withholding, both in terms of understanding really how the new tax laws affect us, to the political climate.
I may start looking at things to get a smaller refund...and then again I may not. There's only so much I can keep up with right now.
I also really don't care about giving the gov't a large loan for a year. Interest rates what they are, and given that Trump is also now trying to politicize the fed such that they will bend to his will...well, we're not seeing interest rates of the 70s and early 80s any time soon.
That depends on what you would use the money for. Sure, you could stick it in a savings account earning almost nothing, but what if the choice was to instead pay down credit cards at 12%, 18%, or 29%? Makes a big difference then. Maybe not for you, depending on your situation, but for many people? Or investing it? What might the returns be on that money? It is not simply interest rates that matter.
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TheHaitian
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Post by TheHaitian on Apr 12, 2019 13:05:15 GMT -5
Happy with the way things are, why complicated it?
Make it simpler, not more complicated!!!
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movingforward
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Post by movingforward on Apr 12, 2019 13:21:56 GMT -5
Happy with the way things are, why complicated it? Make it simpler, not more complicated!!! I agree and I guess my question is will it really make a difference...I am little bit confused as to whether they are making people claim a certain amount or just having people fill out this information so they know what they can claim in order to get $0 back at the end of the year. If people still have the option to do whatever the hell they want then that is exactly what they are going to do. Just because someone can fill out all this info and the formula says that they can claim 6, or whatever, that doesn't mean that is what they will do. I know people that claim zero because they want a large refund. They know they could claim more but they don't want to. Are they actually going to MAKE people claim a certain amount or are they just letting people know what they SHOULD claim
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Deleted
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Post by Deleted on Apr 12, 2019 13:36:42 GMT -5
So, I took the time to look at the actual draft of the form and it's really not that much different. There are just more worksheets for increased accuracy. The allowance certificate you give to your employer is pretty much the same as always so it's not like they see all the other info that you were using to calculate withholdings.
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