Spouse has almost zero federal income tax withheld on paychecks

The W-4 form changes from 2020 definitely made things more confusing for a lot of people! Based on your spouse's income of $40,000 with only $212 withheld, something is definitely off with the W-4 setup. The most common mistake I see is that people miss checking the box in Step 2(c) for "Multiple Jobs or Spouse Works" when both spouses are employed. If this box isn't checked, the system assumes this is the only income in the household and applies the full standard deduction to this job, resulting in little to no withholding. Another possibility is that your spouse might have filled out Step 3 (for claiming dependents or other credits) with an amount that's too high, which would reduce the withholding. To fix this, I'd recommend completing a new W-4 form with these steps: 1. Check the box in Step 2(c) for multiple jobs 2. Leave Step 3 blank unless you have qualifying children 3. If you want extra withholding to catch up, add an additional amount in Step 4(c) The IRS calculator is helpful, but sometimes people miss entering all their information correctly.

After struggling with a similar issue (my husband had almost no federal tax withheld), I discovered taxr.ai (https://taxr.ai) and it completely solved our withholding problems. I uploaded our W-2s and pay stubs, and the tool analyzed exactly why his withholding was so low - turned out we had accidentally claimed too many dependents on his W-4! The site guided us through exactly how to fill out a new W-4 for both of us, considering our combined income. Now his withholding is where it should be, and we won't get hit with a huge tax bill next April. They even have a withholding projection tool that shows how different W-4 adjustments will affect your paycheck and annual tax situation.

Just wanted to update that I tried taxr.ai after asking about it, and wow - it was incredibly helpful for our mixed W-2/self-employment situation! The site analyzed our prior year tax return and current pay situations, then showed us exactly why we were having withholding problems. For my wife's W-4, we learned we needed to add an additional amount on line 4(c) rather than just checking the multiple jobs box. For my self-employment, it created a quarterly estimated payment schedule that accounts for the uneven income I earn throughout the year. Best part was seeing the projected impact on our tax return before making any changes. Definitely better than the generic advice I was getting before!

If you're struggling to get through to the IRS to ask about withholding issues (like I was for WEEKS), try Claimyr (https://claimyr.com). I was pulling my hair out trying to reach an actual human at the IRS to clarify some W-4 instructions, but kept getting disconnected or told to call back later. A friend recommended Claimyr, and you can see how it works here: https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue and call you when an agent is about to answer. Got connected to an IRS rep in about 45 minutes instead of spending all day redialing! The IRS agent walked me through exactly how to fill out the W-4 for my specific situation where my wife's withholding was way too low last year.

I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it since nothing else was working. Within an hour, I was actually speaking to an IRS representative about my withholding problems! The IRS agent explained that for married couples, the W-4 assumes the standard deduction is split between both jobs unless you indicate otherwise. The agent walked me through exactly how to complete the W-4 when both spouses work - turns out I needed to use the multiple jobs worksheet (not just check the box) and enter a specific additional withholding amount. They even calculated the right number based on our salaries. Would have taken me weeks to figure this out on my own if I could have even gotten through to ask. Sometimes it's worth paying for convenience!

Have you considered just doing married filing separately? My wife and I had a similar issue where her job wasn't withholding enough, and we kept ending up owing a ton at tax time. We switched to filing separately and now her withholding is correct since it's calculated just on her income.

i had same issue with hubby last yr. our tax guy said easiest fix is just put "SINGLE" on w4 even tho ur married. been doing that for 2 years now and withholding is perfect!!! they take out more but no surprise tax bill in april!!

I feel your pain - I went through the exact same nightmare with my spouse's withholding! The 2020 W-4 changes really threw everyone for a loop. Here's what finally worked for us after two years of getting it wrong: Don't rely solely on the IRS calculator - it's helpful but can miss nuances. Instead, look at your previous year's tax return and calculate roughly what your tax liability should be for this year based on your expected income. For a $40,000 salary with only $212 withheld, your spouse's W-4 is definitely treating them as if they have no other household income. Make sure you check the "Multiple Jobs or Spouse Works" box in Step 2(c), but more importantly, use the worksheet that comes with the W-4 form to calculate the additional amount needed in Step 4(c). As a quick fix for this year, I'd recommend having your spouse add at least $100-150 per paycheck in additional withholding on line 4(c) to catch up. You can always adjust it down later if it's too much. Better to get a refund than owe a huge amount plus penalties! The key is coordination - both spouses need to fill out their W-4s together, not separately.