How do I fill out W4 form to reduce my federal tax withholding amount?

You can adjust your withholding by completing a new W4 form with your employer. Since the 2020 redesign of the W4, you have a few options to reduce your withholding: The simplest way is to use Step 4(b) on the W4 form where you can enter deductions you plan to claim beyond the standard deduction. This will reduce your withholding. Based on your refund amount, you could estimate an additional deduction amount that would bring your withholding closer to your actual tax liability. Another option is to use Step 4(c) where you can request an additional amount to be withheld (or in your case, a negative number to reduce withholding). This is more direct but requires you to calculate exactly how much less you want withheld per pay period.

After struggling with similar overwithholding issues, I found this amazing tool at https://taxr.ai that helped me figure out exactly what to put on my W4. I uploaded my last tax return and current pay stubs, and it analyzed everything to show me precisely how to fill out my W4 to get less withheld without owing at tax time. The best part was it showed me that I could adjust the "multiple jobs" checkbox on my main job W4 since I was essentially being double-counted for my side income. The tool calculated exactly what deduction amount to put in box 4(b) based on my specific situation.

Just wanted to update after trying the taxr.ai site that was mentioned earlier. I was honestly surprised by how helpful it was for my situation with variable income. It showed me that I'd been drastically overwithholding on my W4 because I was checking both the multiple jobs box AND having additional withholding. The tool recommended I keep the multiple jobs box checked but add a specific amount in Box 4(b) to offset the excessive withholding. I submitted my new W4 last week and my paycheck yesterday had almost $175 more than before! And according to their projection, I'll still get a small refund next year rather than owing anything.

If you're having trouble reducing your withholding and getting someone at the IRS to help explain your options, you might want to try https://claimyr.com - they helped me get through to an actual IRS agent in about 15 minutes when I was completely stuck trying to adjust my W4 correctly. I had already waited on hold for 2+ hours multiple times before giving up, but with their service I got connected right away. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through exactly how to complete my W4 to reduce withholding without triggering an underwithholding penalty, which was super helpful since my situation is complicated with multiple income sources.

Ok I need to eat my words about Claimyr. I was totally skeptical after seeing it mentioned here, but I was desperate after my 5th attempt to reach the IRS about my withholding issues. I decided to try it, and I'm shocked to say it actually worked exactly as advertised. I got connected to an IRS agent in about 20 minutes, and they walked me through exactly how to fill out my W4 to reduce my withholding. The agent explained that in my case, I should NOT check the multiple jobs box on my primary job W4 since my second job is small, and instead just add a specific dollar amount on line 4(b). My new paycheck came today with an extra $230 that used to go to excessive withholding. Over the year that's almost $6000 more in my pocket now instead of waiting for a refund!

Has anyone tried just claiming exempt? I did that last year and didn't have any federal taxes taken out, then just paid what I owed at tax time. Seemed easier than trying to guess the right amount on all these W4 forms.

Anybody know if the new W4 form is different for 2025 taxes? I heard they were making changes to it this year and I want to make sure I'm filling out the right version.

I've been dealing with the exact same issue! After years of getting huge refunds, I finally figured out that the key is understanding how the "multiple jobs" checkbox works on the W4. When you check that box, the form assumes your side gigs are comparable in income to your main job, which causes massive overwithholding. Since you mentioned your side gigs are smaller, you might want to try unchecking that box on your main job's W4 and instead use Step 4(b) to add deductions. Here's what worked for me: I calculated my total refund from last year, divided it by the number of pay periods, then multiplied by about 10 to get an estimated deduction amount for Step 4(b). So if you got a $3,000 refund and are paid bi-weekly (26 pay periods), that's about $115 per paycheck you overpaid. Multiply by 10 and you could put around $1,150 in additional deductions on Step 4(b). The IRS withholding calculator on their website can help you get a more precise number, but this rough calculation should get you much closer to breaking even rather than giving the government that interest-free loan!

This is exactly the situation I was in! I was getting refunds of $4,000+ each year which was driving me crazy. After reading through all these responses, I tried the approach that several people mentioned about unchecking the "multiple jobs" box on my primary W4 since my side income is relatively small. I also used the rough calculation method - took my refund amount, divided by pay periods, then multiplied by about 10 to get a deduction amount for Step 4(b). For my $4,200 refund with bi-weekly pay, that worked out to about $1,615 in additional deductions. My first paycheck after the change had an extra $160 that used to go to overwithholding! I'm planning to monitor this closely and may need to fine-tune it, but it's so much better than essentially lending the IRS thousands of dollars interest-free all year. One thing I learned is that the "multiple jobs" checkbox is really designed for people with multiple substantial income sources, not those of us with a main job plus some smaller side gigs. That was the key insight that finally helped me fix my withholding issue.

I went through this exact same frustration last year! After getting a $3,800 refund, I realized I was essentially giving the government an interest-free loan while I could have been putting that money to work for me. The breakthrough for me was understanding that the "multiple jobs" checkbox is really intended for people with multiple substantial income sources of similar size. Since your side gigs are smaller, that checkbox is likely causing massive overwithholding on your main job because the system assumes all your jobs are comparable. Here's what I'd recommend based on what worked for me: 1. **Uncheck the "multiple jobs" box on your primary job's W4** - Keep it checked on your side gig W4s, but remove it from your main job since that's where the overwithholding is happening. 2. **Use Step 4(b) for additional deductions** - Take your refund amount, divide by your number of pay periods, then multiply by roughly 10-12 to estimate how much in additional deductions to claim. For example, if you got a $2,400 refund and are paid bi-weekly, that's about $92 per paycheck you overpaid, so you could put around $1,000-1,200 in Step 4(b). 3. **Monitor closely** - Check your paystub after the first paycheck to see the difference, and consider doing a mid-year check with the IRS withholding calculator to make sure you're on track. The goal is to get as close to breaking even as possible. Even if you end up owing a small amount (under $1,000), you'll avoid penalties and you'll have had access to your money all year instead of waiting for the IRS to give it back to you without interest!

I was in almost the exact same situation last year! Getting massive refunds while essentially giving the IRS an interest-free loan was so frustrating. After reading through all the great advice here, I want to add one thing that really helped me understand the process better. The IRS Publication 15-T (Federal Income Tax Withholding Methods) actually explains in detail how the withholding calculations work when you check that "multiple jobs" box. It assumes each job should withhold as if it's your only source of income, then applies additional withholding to account for the higher tax bracket you'll be in with combined income. For people with one large job and small side gigs, this creates massive overwithholding. What worked for me was similar to what others have shared: I unchecked "multiple jobs" on my primary W4 and used Step 4(b) to add deductions. But I also found it helpful to calculate not just based on last year's refund, but also to estimate my actual effective tax rate to make sure I was in the right ballpark. The peace of mind of having more money in each paycheck instead of waiting for the government to return my own money has been amazing. Even if you end up owing a small amount at tax time (under $1,000 to avoid penalties), you're still way better off having access to your money throughout the year.