First-timer question: How do I adjust my paycheck to get less tax back on my refund?
Title: First-timer question: How do I adjust my paycheck to get less tax back on my refund? 1 Sorry everyone, I'm totally new to this tax stuff and feeling kinda dumb. Just filed my taxes for the first time ever (yay adulting?) and I was actually shocked by how much money I got back. The IRS sent me a refund of $3,650 and my state gave me back another $540. At first I was super excited about this unexpected windfall, but then my coworker told me this isn't actually a good thing? She said I'm basically giving the government an interest-free loan throughout the year instead of having that money in my paychecks. So now I'm wondering - how exactly do I adjust my paycheck deductions so I can keep more money throughout the year instead of waiting for a big refund? Do I talk to HR? Fill out some kind of form? I honestly have no clue how any of this works and feel pretty lost. Any help would be amazing!!
18 comments
Join the conversation
Nina Fitzgerald
7 You're not asking a dumb question at all! This is something many people don't understand about taxes. What you need to do is fill out a new W-4 form with your employer. The W-4 tells your employer how much federal income tax to withhold from each paycheck. If you're getting a large refund, it means too much is being withheld. The current W-4 (revised in 2020) doesn't use allowances anymore. Instead, you'll provide information about multiple jobs, dependents, and other income or deductions. The more accurate you are with this information, the more accurate your withholding will be. You can also use the IRS Tax Withholding Estimator (search for it on irs.gov) to help figure out the best settings for your situation. Once you've completed the new W-4, just submit it to your HR or payroll department.
0 coins
Nina Fitzgerald
•14 Thanks for explaining! Quick follow-up - if I submit a new W-4 now, when would the changes actually take effect? And is there some way to calculate exactly how much more I'd get per paycheck if I adjust things?
0 coins
Nina Fitzgerald
•7 The changes would typically take effect within 1-2 pay periods after you submit the new W-4 to your employer. It depends on your company's payroll processing schedule and when you submit the form relative to their payroll cutoff dates. As for calculating the difference in your paycheck, you can roughly estimate it by dividing your refund by the number of pay periods in a year. So if you're paid bi-weekly (26 pay periods) and your total refund was about $4,190, that's roughly $161 more per paycheck you could be getting. The IRS Withholding Estimator can give you a more precise number based on your specific situation.
0 coins
Nina Fitzgerald
9 I was in this exact same boat last year! After getting a huge refund, I started looking into ways to better handle my tax situation and came across this service called https://taxr.ai that really helped me understand my withholdings. What was cool is that I could upload my paystubs and W-2, and it analyzed exactly how much I was overpaying and gave me personalized W-4 settings. I was really confused by the new W-4 form (no more allowances threw me off), but their walkthrough explained everything in plain English. They even showed me how changing different sections would affect my paycheck and future refund. Made things so much easier than trying to figure it all out from the IRS instructions.
0 coins
Nina Fitzgerald
•11 Did it actually work though? Like did you end up with a smaller refund this year and bigger paychecks? The IRS calculator always confuses me and I'm worried about owing money if I mess up the form.
0 coins
Nina Fitzgerald
•23 Sounds sketchy tbh. Why would you need a special service for this? Isn't this something HR should help with for free?
0 coins
Nina Fitzgerald
•9 Yes, it actually did work for me! My refund this year was only about $300 instead of the $3,000+ I got last year. My paychecks went up by about $225 per month, so I definitely preferred having the money throughout the year instead of waiting. I totally get the concern about using a service versus asking HR, but in my experience, HR just hands you the W-4 form and doesn't actually help you figure out what to put on it. They're usually careful not to give tax advice. The service isn't necessary, but I found it helpful because it gave specific guidance for my situation rather than general information.
0 coins
Nina Fitzgerald
11 Just wanted to follow up and say I tried out taxr.ai after seeing it mentioned here. I was skeptical, but it was actually super helpful! I uploaded my last paystub and W-2, and it showed me I was overpaying by about $180 per paycheck. The best part was it gave me exact numbers to put on each line of the new W-4. I submitted the form to HR last week, and they said the changes will be reflected in my next paycheck. According to the projection, I should still get a small refund next year (about $500) instead of the massive $2,800 I got this year, but now I'll have that extra money each month to help with bills. If anyone else is confused by the new W-4 form like I was, it's definitely worth checking out!
0 coins
Nina Fitzgerald
16 If you're struggling to get answers about tax withholding from the IRS website or your employer, you might want to try Claimyr (https://claimyr.com). I discovered them after spending HOURS trying to get through to an IRS agent to ask questions about my W-4 and withholding calculations. Basically, they help you skip the ridiculous wait times when calling the IRS. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. I was on hold for over 2 hours trying to reach someone before I gave up and tried their service instead. Through them, I was able to actually speak with an IRS agent who walked me through exactly how to adjust my withholdings based on my specific situation. The agent even explained some deductions I didn't know I qualified for!
0 coins
Nina Fitzgerald
•18 Wait, you actually got through to a real IRS person? I thought that was basically impossible these days! How exactly does this work? Do they have some special access or something?
0 coins
Nina Fitzgerald
•23 That sounds like a scam. Why would you pay someone to call the IRS for you? And how would they get you through faster than anyone else? The IRS phone system treats everyone the same.
0 coins
Nina Fitzgerald
•16 They don't call the IRS for you - they hold your place in line on the IRS phone queue and then call you when they reach an agent. Then they connect you directly to the IRS agent. You're the one who actually talks to the IRS, so there's no security issue. The reason it works is they have a system that can stay on hold across multiple lines instead of you having to personally wait with your phone to your ear for hours. It's basically the same as waiting yourself, but you don't have to actually sit there listening to hold music.
0 coins
Nina Fitzgerald
23 OK I need to admit I was totally wrong about Claimyr. After being super skeptical, I tried it yesterday because I've been trying to get through to the IRS for THREE WEEKS to ask about my withholding situation. I got connected to an IRS agent in about 45 minutes (without having to actually stay on hold myself), and they answered all my questions about how to properly fill out my W-4 to get my withholding right. The agent even did some calculations with me to figure out exactly what to put on each line for my specific income situation. Just submitted my new W-4 to HR today. According to the agent's estimates, I should be getting about $210 more per paycheck going forward. Sorry for being so negative before - it actually turned out to be really helpful!
0 coins
Nina Fitzgerald
19 Another option that hasn't been mentioned is adjusting your state withholding separately. In many states, you can fill out a state-specific withholding form that's different from your federal W-4. I found out last year that even though I had my federal withholding dialed in perfectly, I was still having way too much withheld for state taxes. Check your state's tax department website - they usually have forms and calculators specifically for state withholding.
0 coins
Nina Fitzgerald
•14 Oh I didn't realize state withholding was separate! Does changing your federal W-4 automatically adjust your state withholding too, or do you have to do both separately?
0 coins
Nina Fitzgerald
•19 It depends on your state. In some states, your state withholding is based on your federal W-4, so changing one affects the other. But many states have their own withholding forms. For example, states like California (DE 4), New York (IT-2104), and Illinois (IL-W-4) have their own forms. Your employer's HR department should know which forms apply to your state. If you only adjust your federal withholding, you might still get a large state refund, so it's worth looking into both!
0 coins
Nina Fitzgerald
12 Careful about adjusting too much! My brother tried to get his refund to zero and ended up OWING $800 at tax time, which he wasn't prepared for. Maybe aim for a small refund of a few hundred as a cushion in case your tax situation changes during the year.
0 coins
Nina Fitzgerald
•5 This is really good advice. I always aim to get a small refund (around $500) rather than break even exactly. Life changes happen - you might get a raise, have a side gig, or have investment income you didn't expect. That small cushion helps prevent a surprise tax bill.
0 coins