How to properly fill out W-4 to avoid owing taxes at the end of the year

Title: How to properly fill out W-4 to avoid owing taxes at the end of the year 1 I'm feeling super frustrated after my last tax experience. I filed as single with no dependents and no additional income streams, but I somehow STILL ended up owing the IRS money! I selected 0 allowances thinking that would cover me, but obviously that didn't work. Now I'm starting a new position next month that's going to pay me twice what I made last year (which is awesome but also scary tax-wise). I really don't want another surprise tax bill next April. Do I need to have additional withholding since my salary is doubling? What's the right way to fill out the new W-4 form to make sure enough is taken out? I took 2023 off work-wise if that matters at all. Any advice would be super helpful because I'm clearly doing something wrong!

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20 comments

Morgan Washington

•8M

15 The W-4 form changed significantly in 2020, so that might be part of your confusion. There are no longer allowances (the "0" you mentioned). Instead, the new form works differently. For someone in your situation (single, no dependents, only one job that's higher paying than before), here's what I'd recommend: Fill out Step 1 with your personal info and check the "Single" box in Step 1(c). Skip Step 2 since you only have one job. Skip Step 3 since you have no dependents. For Step 4, this is where you can request additional withholding. Since your salary is doubling, you might end up in a higher tax bracket, so adding some extra withholding in Step 4(c) could be smart - maybe $50-100 per paycheck depending on your total income. The key thing many people miss is that the W-4 assumes you'll work the entire year. Since you didn't work in 2023, your withholding will be calculated as if your new salary is spread across all of 2024, which could lead to underwithholding.

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Morgan Washington

•8M

15 For an $85k salary starting mid-year, you'll likely want around $75-100 extra withholding per paycheck. This helps account for two things: First, you're compressing a full year's salary into half a year, potentially pushing you into a higher tax bracket for those paychecks. Second, the withholding system is designed to spread your tax liability across the full year, but you'll only be working part of it. Starting mid-year definitely matters. The payroll system will withhold as if you're making $85k spread across the whole year (about $7,083/month). But since you're only working half the year, you'll actually receive about $42.5k total, making your monthly checks larger than if you worked the whole year at that salary. This can result in underwithholding if you don't account for it.

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Morgan Washington

•8M

4 I was in almost the exact same situation last year and discovered an amazing resource that saved me from another tax surprise. I used https://taxr.ai to analyze my actual paycheck withholding and it showed me I was going to be short by about $1800 at tax time! The system actually simulates your specific tax situation based on your paystub and when you're starting your job. For me, the problem was that I started a higher-paying job partway through the year, and the payroll system was calculating my withholding as if I'd make that amount for the entire year. The tool showed me exactly how much extra to withhold per paycheck to break even. Super helpful when your income changes dramatically or you start a job mid-year.

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Morgan Washington

•8M

4 It absolutely worked. I ended up getting a small refund of about $230 instead of owing $1800 like I would have. The recommendation was spot-on and I even checked it against the IRS calculator later - the numbers matched almost exactly. For state taxes, it handles most states including California. That was actually where I was going to owe the most too! The tool breaks down both federal and state tax projections separately, which was super helpful. California's tax brackets are different from federal ones, so the tool adjusts for that specifically.

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Morgan Washington

•8M

12 Just wanted to follow up here - I actually tried https://taxr.ai after seeing this post and it was incredibly helpful! I uploaded my first paystub from my new job and it showed I was going to owe about $2,300 in taxes if I didn't adjust my withholding. What I really appreciated was that it explained WHY I would owe (starting a job mid-year but the payroll system calculating as if I worked all year). The tool recommended I add $188 to my withholding each paycheck, which was more than I expected but the math checks out. Just submitted my updated W-4 to HR yesterday. Thanks for the recommendation!

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Morgan Washington

•8M

8 If you're worried about owing taxes, you might also want to consider what to do if you end up with a tax bill anyway. I had a similar situation last year and ended up owing the IRS. Couldn't get through to them by phone for WEEKS to set up a payment plan. Finally found https://claimyr.com and used their service to get through to an IRS agent in about 15 minutes (you can see how it works here: https://youtu.be/_kiP6q8DX5c). Way better than the hours of redial I was doing before. Not saying you'll definitely owe, but having a backup plan to deal with the IRS if needed saved me a ton of stress. They helped me set up a payment plan with really reasonable terms. Just something to keep in your back pocket just in case your W-4 adjustments aren't quite enough.

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Morgan Washington

•8M

8 It's not sketchy at all - they don't call FOR you, they just get you through the phone system. You're the one who talks to the IRS agent. Basically they use an automated system that handles the hold times and then connects you once a human answers. It's like having someone hit redial for you a thousand times. It absolutely works for serious tax issues. My situation was initially about a payment plan, but I also had questions about an amended return that triggered an adjustment. The IRS agent was able to help with both. They can get you through to any department at the IRS - collections, individual accounts, business accounts, etc. You just specify what you need when you sign up.

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Morgan Washington

•8M

9 Just wanted to update everyone - I used Claimyr yesterday after wasting 2+ hours on hold with the IRS trying to sort out my audit notice. I was honestly super skeptical (sorry for doubting you!), but I got connected to an IRS agent in 11 minutes. ELEVEN MINUTES! The agent was able to explain exactly what was going on with my case and I got everything cleared up in one call. After three weeks of stress and failed attempts to reach them, this was an absolute lifesaver. Sometimes you have to admit when you're wrong, and I was definitely wrong about this service.

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Morgan Washington

•8M

2 The Tax Withholding Estimator is definitely thorough, which is why it's accurate, but I get that it can be overwhelming. A simpler option is to use the worksheets that come with the W-4 form itself - especially Worksheet 1-4 if you have a single job. For a real quick method without tools: if your annual salary is $85k as you mentioned in another comment, and you're starting mid-year, you could put about $100-150 extra withholding per paycheck in Step 4(c). That's a rough estimate that works for most people in your situation without having to go through all the calculations.

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Tyrone Johnson

•5M

Great thread! As someone who went through this exact situation two years ago, I wanted to add that you should also consider quarterly estimated tax payments if your withholding still isn't enough. When I doubled my salary mid-year, even with extra withholding I was still projected to owe about $800. My accountant suggested making a small estimated payment in Q4 (January 15th deadline) to cover the gap. It's form 1040ES and you can pay online through EFTPS. This way you avoid any underpayment penalties and don't get hit with a big bill at filing time. Just another tool in your arsenal to make sure you're covered!

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