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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Just got married and want to know how I can adjust my withholding

Customer Question

Just got married and want to know how I can adjust my withholding for the upcoming year (2010). Currently filing as single with 0 allowances. Expect a big refund this year ($7,000+). But would rather get that in my paychecks next year. My salary = $100,000. Wife is unemployed. Interest bearing accounts return about $2,500 per year. Only retirement contributions are to a Roth IRA. No 401k, no HSA, no alimony/child support or anything weird. No deductions, only the standard. Will be filing Married - Jointly. Live and work in NJ. How can I adjust my withholdings to get the most in my pay-check? Basically get as close as possible to not owing or getting a refund?
Submitted: 4 years ago.
Category: Tax
Expert:  Merlo replied 4 years ago.

Hello asking,

 

The 2010 tax tables have not yet been published, but they are expected to be either the same or very close to the 2009 tables, so I will base my answer to you on the 2009 information.

 

If you will have total income for the year from your salary and interest of $102,500, then after applying your standard deduction of $11,700 as a married couple, plus two personal allowances of $3,650 each, this will give you taxable income for the year of $83,500. Your estimated federal tax liability on that amount will be $13,250.

 

If you fill out your W-4 form as married with 2 allowances, they would withhold approximately $13,000, which means you would owe another $250 at the end of the year. If you fill out your W-4 form as married with 1 allowance, they would withhold approximately $13,912, which means you would get a refund for approximately $662 at the end of the year.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you asking

 

 

Customer: replied 4 years ago.

If I were to decide to use Married With 2 Allowances, is that for both Federal and State?

Expert:  Merlo replied 4 years ago.

Hello asking,

 

The estimates I gave you are for federal tax only. But when you fill out your W-4 form those same allowances generally apply to your state taxes as well.

 

Based on your income I estimate that your NJ state tax for the year should be approximately $2900. If you claim married with 1 exemption they should withhold $3,000. If you claim married with 2 exemptions they should withhold $2,800. This is for NJ taxes only.

 

If this was helpful please press the Accept button.

 

Thank you asking

 

 

Customer: replied 4 years ago.

Last question...

 

So if I change to Married - 2 Allowances for BOTH federal and state,

how much more can I expect in a bi-weekly paycheck (26 per year)?

 

... taking into consideration both federal AND state.

 

Thank you. I'll be accepting your answers =)

Expert:  Merlo replied 4 years ago.

Hello asking,

 

I don't really think I can answer your question, and the reason is that you said you are expecting a $7,000 refund this year. If your are currently filling out your W-4 form as single with no allowances, and you will be claiming the standard deduction when you file, then I cannot see any way possible you should be getting a $7,000 refund.

 

All I can tell you is that if you change your form to married with 2 allowances for both federal and state, they should withhold approximately $13,000 for federal taxes and $2,800 for NJ state taxes. Compare that to what was withheld from your pay this year for federal and state taxes, and that will give you an idea of how much more you should expect on your paychecks.

 

Customer: replied 4 years ago.

I'm assuming a $7,000 refund based on the fact that my W4 has been "Single - 0 Allowances" all year, but I'll be filing as "Married - Filing Jointly".

 

I just got married 2 weeks ago.

 

Wouldn't that mean that I've overpaid all year long,

but when I file (married jointly), I'll get $7,000 back?

 

$3,650 x 2 = $7,300 - $250 = $7,050

 

Or am I mistaken?

Expert:  Merlo replied 4 years ago.

I did not realize you were getting married before the end of the year, so that will make a difference in your refund since you will be filing as married with one extra dependent.

 

But it does not mean you will be getting back $7,000.

 

The $3,650 exemption you get for each dependent strictly reduces your taxable income by $3,650. It doesn't mean you get that much back in tax for each dependent you claim.

 

Customer: replied 4 years ago.

Sorry about that.

 

W4 currently says "SINGLE 0 ALLOWANCES".

Will be filing "MARRIED FILING JOINTLY" for 2009.

 

TurboTax's Life Events Calculator says I'll get an additional $6,816:

http://turbotax.intuit.com/tax-tools/

 

That's where I got the $7,000 figure.

 

My goal was to figure out how many allowances I need to claim

to get that in my pay-checks and not wait until I file.

 

Does that $6,816 figure make sense?

Would "MARRIED 2 ALLOWANCES" be what I need to do?

 

Expert:  Merlo replied 4 years ago.

I apologize, but I need to leave the forum at this time and will not have time to run all of these additinal calcualtions for you.

 

But I will put your question back on the open board to see if someone else here has time to help you with your questions.

 

Thank you

Customer: replied 4 years ago.

To re-word the question so I'm clearer --

 

Income = $100,000.
Interest income = $2,500.

Current W4 status = Single 0 Allowances

No 401k, HSA, or other weird deductions.
No alimony, child support or anything else.

 

Just got married two weeks ago.
Wife is unemployed.

 

TurboTax's Life Events Advisor says I can expect $6,816 more if I file jointly: http://turbotax.intuit.com/tax-tools/

 

Is that true? If so, how many allowances do I need to add to my W4 to get that in in my paychecks in 2010 instead of waiting for my refund?

Expert:  Merlo replied 4 years ago.

It would be helpful to know how much your employer has withheld year to date for federal and NJ state taxes and how much they withhold each pay period.

 

Customer: replied 4 years ago.

YTD --

Federal: $14,000

NJ: $3,050

 

Each pay period --

Federal: $800

NJ: $180

 

Keep in mind, I only expect to receive about $82,000 this year.

Next year, it will be $100,000 for the year.

I got a raise in August, which is why the numbers changed.

Expert:  Merlo replied 4 years ago.

I have put your question back on the board to see if someone else can help you with this.

 

If someone posts a response, you will receive an email notification that a response has been posted.

 

 



Edited by Merlo on 12/1/2009 at 5:04 PM EST
Customer: replied 4 years ago.
Ok, thank you for your help.
Expert:  Merlo replied 4 years ago.

No problem

 

Customer: replied 4 years ago.

...

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