How much extra withholding should I add to W4 form to avoid owing taxes?

13 Thanks for this advice. Quick question though - my parents are both working at different companies. Should they split the extra withholding amount between them or would it be better to have most of it taken from the higher earning spouse?

7 Great question! Either approach works for the IRS - you can split it evenly or have more withheld from the higher earner. Sometimes it makes sense to have more withheld from the higher earner since they're likely in a higher marginal tax bracket, meaning each dollar withheld is potentially offsetting a higher tax rate. If one of them has more stable income than the other, it might also make sense to have more withheld from that person's paycheck for consistency. Just make sure the total extra withholding across both W4 forms adds up to what you're targeting.

22 How accurate was the withholding calculation from taxr.ai? I've tried those calculators on the IRS website before and the numbers seemed way off compared to what actually ended up happening.

15 Does it work for people who are self-employed too? My husband and I have W2 jobs but also some freelance income that always throws off our calculations.

19 The calculation was surprisingly accurate. Unlike the IRS calculators that just give general guidelines, taxr.ai analyzed our actual pay stubs and tax situations. We've been using the adjusted withholding amount for about 6 months now, and our quarterly projection shows we're right on target. It definitely works for mixed income situations too! The tool specifically asks about additional income sources like self-employment, and factors that into the withholding recommendations. It was actually the freelance income that was causing most of our withholding problems too since that requires separate estimated tax payments or increased W2 withholding to cover it.

16 Wait, this actually works? I thought it was impossible to get through to the IRS these days. Last time I tried, I was on hold for 2+ hours and then got disconnected. How much does this cost?

11 This sounds too good to be true. How exactly does this service get you through when regular people can't get through the IRS phone lines? Seems sketchy that they could somehow jump the queue when millions of people are waiting.

9 It absolutely works! The service basically automates the calling and waiting process. It calls repeatedly using their system until it gets through, then calls you when an agent is on the line. So you don't have to sit there listening to hold music for hours. Regarding how it works - they don't jump any queues. They just have technology that keeps trying different IRS numbers and times when call volume might be lower. The same approach you could use if you had unlimited time and multiple phones. Nothing sketchy about it - you're still talking to the same IRS agents through the regular channels, just without the waiting.

3 I tried that IRS tool and found it really confusing... it asked for so much detailed information I didn't have on hand. Is there a simpler approach or rule of thumb to just get in the ballpark?

4 The IRS tool is definitely the most accurate option, but a simple rule of thumb is to aim for about 15% of gross income going to federal taxes for that income level. So for $86,000, that's roughly $12,900 annually or about $1,075 monthly in total federal withholding. Check their recent paystubs to see how much is currently being withheld, and then add extra withholding to make up the difference. It won't be perfectly accurate, but it should get them much closer to breaking even rather than owing a lot.

18 Yes, I had a similar experience! The default withholding on the new W4 form seems to be optimistically low. I think it's designed to put more money in people's pockets throughout the year, but then many end up with a bill at tax time. My husband and I (combined income around $95k) had to add $275 extra per paycheck to avoid owing.

This is really smart advice about the quarterly payments! I hadn't thought about splitting it that way. Quick question - when you set up quarterly payments, do you have to estimate the full year's tax liability or can you just pay what you think you'll owe for that quarter? I'm worried about getting the math wrong and either overpaying or still ending up short.

For quarterly payments, you're actually paying based on your estimated full-year tax liability, not just that quarter's portion. The IRS wants you to make equal payments throughout the year - so you'd take your total expected tax bill and divide by 4. For example, if you estimate you'll owe $12,000 in taxes for the full year, each quarterly payment would be $3,000. The key is making a reasonable estimate at the beginning of the year and then adjusting if your situation changes significantly. Don't stress too much about getting it perfect - as long as you're making good faith efforts to pay what you'll owe, the IRS is pretty reasonable. You can always adjust your next quarter's payment if you realize you're off track. The bigger risk is underpaying significantly, which could trigger penalties. I'd recommend starting with a conservative estimate (maybe even slightly higher than you think you'll owe) and then getting any overpayment back as a refund rather than risking another big tax bill.

This is really helpful, especially the point about multiple jobs not "knowing" about each other! I'm dealing with this exact issue right now. My spouse and I both work part-time at different companies, and I think that's why our withholding has been so off. I tried filling out Step 2 on the W4 but got confused by all the calculations. Would it be simpler to just skip that section and add the extra flat amount like you suggested? Also, when you say $400-500 extra per month combined, would you recommend splitting that evenly between both their W4s or putting more on the higher earner's form? Thanks for breaking this down - it's exactly the kind of practical advice I was looking for!

You're absolutely right that the multiple jobs issue is tricky! For the W4 Step 2 - honestly, if it's confusing you, skip it and go with the flat extra amount approach. It's much simpler and will get you most of the way there. For splitting the $400-500 extra monthly withholding, either approach works fine. You could split it evenly ($200-250 each) or put more on the higher earner since they're likely in a higher tax bracket. The main thing is making sure the total adds up to what you need. One practical tip: start with a slightly higher amount (maybe $500-600 combined) for the first few months, then you can always dial it back if you're getting too big of a refund. It's better to overpay a bit and get money back than to still owe come tax time. You can always check your progress by looking at your paystubs to see how much total federal tax has been withheld year-to-date.