How do I figure out withholdings?

si_jennifer · February 2014

Hi, I've never posted here before but lurk on and off.

I've used calculators online to try to figure out what me and my husband should withhold for taxes and they make my head spin! I'm not sure what goes where and the fact that I'm starting a new job, starting to invest in a 403b, just started my son in preschool, can pay for part of said pre-school with pre-tax dollars through my job and other life changes makes me feel like taxes this year are going to be much different than last year.

Any resources to help me figure this out? It would need to be like a "taxes for dummies" type of resource as this is not my field of expertise. Or should I just withhold 0 and kind of see how it works out?

Thanks in advance for any advice and let me know if you need more information!

hoffse · February 2014

Well a lot of it has to do with whether your spouse works and how much the two of you make together. The tax system is really set up to benefit married couples that have very disparate incomes or has one bread-winner and one person stay at home. If you both work and make about the same as each other, you'll usually need to withhold more.

I withhold as 0. I'm going to have H withhold as single when he starts in September. We're going to be subject to the marriage penalty, and most of our retirement contributions are not pre-tax, so we will owe a lot in taxes. If we had a kid, I would probably have us both withhold as 0 and just see what happens (always prepared to pay though) since you get an extra exemption for them.

The IRS DOES have a withholdings calculator, but it's kind of finicky and requires you to know a lot of info you might not know. That said, with some patience you can usually get through it. Just read every single line and make sure you enter info for everything. Here's the link - you have to click on the "Continue to Withholding Calculator" link to get there.

http://www.irs.gov/Individuals/IRS-Withholding-Calculator

If you decide to withhold 0 and wait and see, just be prepared to pay if you are way off.

si_jennifer · February 2014

Thanks for the advice

How do I figure out withholdings?

Re: How do I figure out withholdings?

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