Hi. Can you advise what " Married, but withhold at higher Single rate" box to mark in my W4 tax form? I am married making 54500 a year, and my husband is making 40000 a year....we plan to file MARRIED filing separately. Also, I would like to know what to fill in in line 5 pf page 1 (5 Total number of allowances you are claiming (from line H above or from the applicable worksheet on page 2)....I am assuming we need to fill in the "2 income worksheet" on page 2 because we are married right? Again, we are married, no kids, but want to file MARRIED FILING SEPARATELY. Thanks for all your help!!
State/Country relating to question: Georgia
The W-4 worksheets are very hard to figure out.
Before I go into what you should do, I would recommend not filing separately if the reason is solely for "gives me a lower tax". It never will. If the reason is one of you has a tax debt and the other does not, I would still consider that it is not a good option. There are actually very few good reasons to file separately. If on has a tax debt, filing a MFJ return and then an injured spouse claim with it usually results in a higher total refund (but it does take longer to get the refund).
As for using the worksheet, yes, you would need to use the 2 Income worksheet. You have to assume that your total tax will be higher than filing a joint return, so using that worksheet is still what you need to do. In many cases, when husband and wife both earn in the range you are in, you end up very short at the end unless at least one of you adjusts your withholding. The reason is that one person with a $40K income and 2 kids would have withholdings as though their total tax was about zero.
The second person would have the same thing. But when you do the taxes at year end, what really happens is that these two incomes stack on top of each other and the second 40K is taxed at around 15% to 25%. So it would not be unusual for one of you to need to file as Married but at the higher Single rate.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information. What happens now? If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
HI...THNAKS FOR YOUR ANSWER. We want to file Married filing separately because my spous has hold like 3 jobs this year and he also has some loses he wants to claim. We figured it will be better for us this year to each have our own refun. Next year we will definetly file jointly.
He makes 40k a year and I make 54k a year. we have 0 kids. The plan is for both of us to check MARRIED, Claim "1" allowance each (line 5 page 1-coming from line H ) and claim "4" on two-earner worksheet line 2 (WE GOT THIS FROM LOOKING AT THE "ALL OTHERS TABLE) - LOWEST INCOME 30,001 - 40,000...says use 4).
What do you think about this? Just making sure we do not have a tax bill at end of year :) TAHNKS FOR YOUR HELP!!!
I am 99% positive that the situation you described above will NOT save you even $1 in tax if you file separately.
My recommendation is to do it BOTH ways and see which is better!
But your withholding should be the same either way you go.
If you both put down Married 4 as the final number on your W-4, I am pretty sure you will be crying the tax blues next year. Without working the tables, I would say you both should be Married, but use the higher Single Rate. If you have no kids, then both use 0 (Single-0), add "1" for each dependent you have.
If you do this today, you will not know the full effect it has because we are 2/3'rds of the year done. But it will give you some idea of any adjustments needed for 2013 when you can start in January with any adjustments.
Over 20 Years experience