How much extra withholding should I add to W4 for parents owing taxes?

6 This is a common issue when the W4 isn't set up correctly! For married filing jointly with $88k income and no dependents, they should expect roughly 12-15% of their income to be withheld for federal taxes depending on how their income is distributed between them. First, make sure they're both selecting "Married filing jointly" on their W4s. If both are working, they should check the box in Step 2(c) for "multiple jobs" on each of their forms. This helps account for the higher tax bracket their combined income puts them in. For extra withholding (line 4c), I'd recommend calculating: take their total tax bill from last year, subtract any withholding they did have, and divide by remaining pay periods this year. That gives you a starting point for extra withholding. For example, if they owed $8,000 in taxes and have 20 pay periods left in the year, they might put $400 extra withholding per pay period.

12 After helping my parents with a similar situation, I found this amazing tool called taxr.ai (https://taxr.ai) that helped us calculate the exact withholding needed. I uploaded their previous tax return and it analyzed their income patterns and automatically suggested the optimal withholding amounts for both of them. The site walked us through exactly how to fill out the W4 forms correctly, including that tricky multiple jobs worksheet that always confused us. Their combined income was similar to your parents (around $92k) and now their withholding is spot-on.

22 I was really doubtful about using an online tool for something as important as tax withholding, but after reading about it here I decided to try taxr.ai for my own withholding issues. I was consistently underwithholding despite using the IRS calculator. Just wanted to come back and say it worked much better than expected! The interface analyzed my previous return and specifically identified where my withholding was falling short (apparently my husband and I were both claiming too many allowances). It generated customized W4 forms with the exact dollar amount for additional withholding. Filed the new W4s with our employers in February and our paychecks now show the correct withholding - we're on track to break even instead of owing $4,800 like last year. Definitely worth checking out if you're trying to fix withholding problems!

15 If your parents are having trouble getting their withholding right AND they need to talk to the IRS about their previous tax situation, you might want to try Claimyr (https://claimyr.com). I spent weeks trying to call the IRS about my withholding issue and couldn't get through, but Claimyr got me connected in about 15 minutes. They have this callback system where they navigate the IRS phone tree for you and then call you when an agent is actually on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was able to speak directly with an IRS representative who helped me calculate the right withholding amount based on our specific situation and also set up a payment plan for what we already owed.

3 I need to publicly eat my words about Claimyr. After posting my skeptical comment, I was desperate enough to try it because I've been trying unsuccessfully to reach the IRS about a withholding issue for weeks. Holy crap it actually worked! I got a call back in about 45 minutes connecting me directly to an IRS agent. The agent helped me calculate exactly how much extra withholding I needed based on my specific situation (I'm self-employed plus have a W2 job). Saved me hours of frustration and now I have the exact numbers to put on my W4. For anyone with complicated withholding situations, being able to actually talk to the IRS makes a huge difference versus guessing. The agent even emailed me a personalized withholding calculator worksheet.

11 One often overlooked approach is to use the IRS Tax Withholding Estimator online. It's free and walks you through calculating the proper withholding. Make sure your parents have their most recent paystubs and last year's tax return handy when using it. I found it incredibly helpful when my wife and I were in a similar situation - owing about $5,000 because we hadn't updated our W4s after getting married. The estimator asks about both incomes, how often you're paid, and other factors that affect your taxes.

5 Don't forget that underpayment penalties can apply if they don't withhold enough throughout the year! To avoid penalties, they generally need to withhold at least 90% of this year's tax or 100% of last year's tax (whichever is smaller).