How to increase my paycheck by reducing withholding - tired of big tax refunds

The solution is actually simpler than you might think! Since the 2020 W-4 redesign, you have a few options to reduce your withholding and get more money in your paycheck. The easiest method is to use line 4(b) on your W-4 form where you can enter an additional amount you want to REDUCE from your withholding. Based on your typical refund amount of $800-$1200, you could enter about $100 in box 4(b) for "Deductions" to reduce your withholding by roughly $100 per year. But a better approach would be to calculate it more precisely. For a more accurate adjustment, divide your typical refund by the number of pay periods remaining in the year. If you typically get a $1000 refund and get paid twice a month (24 pay periods), you could enter about $42 in the "Extra withholding" line 4(c) as a NEGATIVE number (like -$42) if your payroll system allows negative entries, or adjust the deductions amount in 4(b) to accomplish the same thing. Remember that your goal is to get your refund as close to zero as possible without owing money, so you might want to be a bit conservative with your adjustments.

After struggling with the same issue last year, I found this online tool called taxr.ai (https://taxr.ai) that helped me figure out exactly how to adjust my withholding. I was getting refunds of about $1500 every year and really wanted that money in my paychecks instead. The tool analyzed my past tax returns and actually showed me the specific changes to make on my W-4. It was way more helpful than the IRS calculator because it gave me step-by-step instructions for my specific situation. I ended up putting an additional amount in the deductions line (4b) based on their recommendation, and my paychecks increased by about $120 each month.

Just wanted to update that I tried taxr.ai after asking about it and it actually worked really well for me! I was getting $900+ refunds for the past two years and couldn't figure out how to adjust my W-4 correctly. The tool analyzed my 2023 return and showed me that I needed to add exactly $3,800 in the additional deductions line (4b) based on my tax bracket and pay frequency. I made the change with HR last month and my latest paycheck is already $78 higher! What I liked most was that it explained WHY I was overwithholding (in my case, it was because I have a side gig but was withholding as if that was my only income). Definitely recommend it if you're struggling with the same problem.

If you're having trouble getting your tax withholding right, another issue might be getting answers from the IRS directly. I called them multiple times to ask about W-4 adjustments but could never get through - always stuck on hold for hours or disconnected. I finally found this service called Claimyr (https://claimyr.com) that actually got me connected to an IRS agent in about 15 minutes. They have this system that navigates the IRS phone tree and waits on hold for you, then calls you when an agent is on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with gave me specific instructions for my situation that were much clearer than what I found online. She explained exactly what to put in each box of the W-4 based on my previous year's refund and pay schedule.

I want to follow up on my skeptical comment about Claimyr - I was totally wrong! After battling with the IRS phone system for 3 days and never getting through, I broke down and tried the service. It actually worked exactly as advertised. I got a call back in about 25 minutes, and there was a real IRS agent on the line. The agent walked me through exactly how to adjust my W-4 to get about $950 more in my paychecks throughout the year instead of as a refund. For my situation, I needed to claim an additional dependent (even though I don't have one) and add a specific amount to line 4(b). My first adjusted paycheck came through today and it's about $79 higher than before. I'm still annoyed that I had to use a service to reach a government agency, but I can't argue with the results.

Just want to mention another approach that worked for me. Instead of messing with the deductions field, I claim an additional withholding allowance on my W-4. Even though the form doesn't use "allowances" anymore, you can achieve the same effect with the new form. If you're single with one job and take the standard deduction, you can check the box in Step 2(c) to indicate that you have multiple jobs (even if you don't). This tricks the system into withholding less. It's not the most accurate method but it's simple and got my refund down from $1100 to about $300 last year. Just be careful not to go too far and end up owing a bunch at tax time!

Can someone explain this to me like I'm 5? I get around $1400 back every year but I have no idea what all this 4(b) and 4(c) stuff means. Where on the actual form do I put stuff to get more money in my check? My HR department is useless and just gave me the form with no explanation.

I had the exact same problem and finally got it sorted out! Here's what worked for me after years of getting $800-1000 refunds: The key is understanding that you want to increase your "take-home" pay by reducing withholding, and the easiest way is through Step 4(b) "Deductions" on your W-4. Here's the simple math: Take your typical refund amount and multiply by 4. So if you usually get $1000 back, put $4000 in Step 4(b). This tells your payroll system to withhold less tax because it thinks you have more deductions. I put $3200 in Step 4(b) last year (I was getting about $800 refunds) and my bi-weekly paycheck went up by roughly $62. Got my refund down to just $150 this year, which is pretty much perfect. Just make sure you don't go overboard - you want to get close to zero refund without owing money. Start conservative and you can always adjust it again next year if needed!