W-4 Guide: Fill & Download for Free

The IRS doesn't take money out. Your employer does. And your employer takes money out based on the information that you provide them on Form W-4. If you want the employer to take out less so that you get a smaller refund - or pay a little - add a withholding exemption.Little secret: IRS Publication 15 (2014), (Circular E), Employer's Tax Guide tells you exactly how withholding is calculated.

If you are talking about the status you selected on your W-4, you can change it - but you should have a conversation with a tax professional before you do.The status on the W-4 is used by your employer, along with the number of withholding allowances you request, to determine how much income tax will be withheld from your compensation. It has nothing to do directly with how you will actually be able to file at the end of the year - married people use the Single status on the W-2 all the time, for example.You don't want to change the status blindly, because you might find yourself having too little tax withheld if you change the marital designation on the W-4. The status that you report on the W-4 should result from planning out your earnings and estimating your probable liability at the end of the year, then setting up your withholding so that you are having “just enough” withheld to give your desired result (*) come filing time.Publication 15 (2017), (Circular E), Employer's Tax Guide on the IRS Web site contains the withholding tables, and you can compute the information yourself if you like, but a discussion with a professional can also help you do some planning so that you aren't blindsided.

You claim as many allowances as you need to avoid over withholding. I’ve used dozens when complex situations unexpectedly got me months ahead of schedule or beyond my total tax liability for the year.They’re allowances not dependents. The IRS Form W-4 instructions explicitly tell you to increase them to account for things like itemized deductions.There’s no limit as long as you’re withholding substantially all of your taxes in a timely manner after income is earned.Refer to IRS Topic No. 306 Penalty for Underpayment of Estimated Tax and IRS Publication 505 (2018), Tax Withholding and Estimated Tax for the safe harbor rules. Provided the payments were timely, penalties for under withholding aren’t assessed when you withhold the least of $1000 less than your total liability, 90% of this year’s total, and 100% (110% for income over $75K married filing separately or $150K otherwise) of last year’s income tax.You can supplement your W-4 withholding with quarterly estimated tax payments when earnings vary from unpredictable situations like bonus, stock value when restrictions lapse, and capital gains/losses.I track my projected earnings and year to date withholding in a text file, recalculate my remaining state and federal income taxes when my situation changes, and work backwards from that to a number of allowances plus extra using formulas in IRS Publication 15 (Circular E) Employer’s Tax guide and Method B from the California DE 44 Employer’s guide. Unlike the W-4 and California DE-4 worksheets this accounts for year-to-date withholding and does not round up.I aim for $500 state and federal refunds so if I’m busy in the first quarter I can defer filing without penalty.