For 2024, I tried to correct taxes withheld by paying extra quarterly directly, but I would like to fix this for 2025.
Married filing jointly, both my wife and I work.
Her 2024 W-4: 1 claimed allowance, 2x$2000 for dependents = $4000, 2 or more income box checked. She made just under $80,000 in taxable income, but slightly less than $1,500 was withheld for Federal income tax.
My 2024 W-4: no claimed allowances, no dependents claimed, 2 or more income box checked. I also made a little under $80,000 taxable income. Just above $5000 was withheld.
What are we doing wrong here to have so little Federal income tax withheld? Or is this some issue with our employers? We’re in California and we had significantly more state taxes withheld than Federal, so I’m at a loss as to why that’s the case.
The W-4 hasn’t had allowances since 2019, so not sure what you’re referring to there, unless that’s just referring to the state withholding.
It seems like both of your employers are withholding as if you didn’t check the box in step 2c. Are you sure you checked it? A workaround for this is to choose “single” instead of “married filing jointly” and then don’t check box 2c. That withholds the same as MFJ+2c but removes the possibility of your employer overlooking the 2c checkbox.
@Nico
Mine doesn’t show allowances. I added that because my wife’s does. They’re fully digital and you cannot directly fill out the W-4, you have to answer the questions they ask and then it generates a summary where it shows that allowance.
I dug through her paychecks and it looks like they withheld the correct amount for Jan and Feb and then only withheld $7.50 every paycheck for the rest of the year.
May have to go the single route to ensure it works. Thanks!
There is no such thing as allowances on the current W-4, but it does use the $2K dependent amount. It sounds like your employers are using some weird combination of old and new forms, which might be what is causing your problem.
The tax for a married couple filing jointly with $160K of income and 2 dependents under age 17 should be just over $14K.
Each of you should claim Single and $2000 for dependents. That should result in $7200 of withholding for each of you.
Fix both your W-4s and then look at the withholding on each of your next paychecks after the new forms go into effect. Multiply the withholding by the number of pay periods per year and see if the amounts you get are approximately $7200. If not, then your employers are doing something wrong and you will need to ask your payroll people for help.
@Roan
Thanks, withholding as single on the W-4 seems to be the way to go. Super weird as her company is pretty large, but you may be right since they are showing an allowance on there, maybe they are just not calculating correctly at all.