Massive tax refund/changing tax info

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rzk96
Posts: 65
Joined: Sat Apr 15, 2017 9:59 pm

Massive tax refund/changing tax info

Post by rzk96 » Thu Sep 14, 2017 9:55 am

Hey All -
Awhile back someone on here told me I should change my tax stuff due to a massive tax refund I get every year (~10k). Now... I googled and etc but wanted all ya'lls opinions.

1. Single, no kids
2. In GA
3. Anything else I need to post?

.... what allowances can I claim/what all should I do in regards to tax sheets?

Thank you so much.

livesoft
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Re: Massive tax refund/changing tax info

Post by livesoft » Thu Sep 14, 2017 9:56 am

I would simply follow the instructions carefully when submitting a W-4. I suspect that folks getting large refunds probably just put some numbers down without reading the instructions and following them.
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retiredjg
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Re: Massive tax refund/changing tax info

Post by retiredjg » Thu Sep 14, 2017 10:03 am

You can see how much you have had withheld in the past few years (from your W-2's) and just decrease that amount by filling out a new W-4 at work

It's been a long time, but I think you can tell them how many dollars to withhold rather than doing it by filing status and number of dependents.

For example, if you've been withholding $15k each year and getting back $10k....just have them withhold something like $6k instead of $15k.

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Pajamas
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Re: Massive tax refund/changing tax info

Post by Pajamas » Thu Sep 14, 2017 10:05 am

livesoft wrote:
Thu Sep 14, 2017 9:56 am
I would simply follow the instructions carefully when submitting a W-4. I suspect that folks getting large refunds probably just put some numbers down without reading the instructions and following them.
My experience when working was that the correct W-4 calculation would result in way too much being held out because I was maximizing every possible retirement contribution and itemized deductions. I had to add several allowances to account for that.

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grabiner
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Re: Massive tax refund/changing tax info

Post by grabiner » Thu Sep 14, 2017 10:06 am

The extra worksheets on the W-4 work in simple situations; they tell you how many more allowances to claim for itemized deductions, and how many fewer for income not subject to withholding.

For more complicated situations, use the worksheets in IRS Publication 505, Tax Withholding and Estimated Tax. Essentially, you fill out an estimated tax return, then convert the tax due on the mock return to the appropriate number of withholding allowances. This deals with things such as income taxed at a non-standard rate (you don't want to withhold tax at 28% based on capital gains or qualified dividends taxed at 15%), tax credits, and phase-outs of tax benefits.
David Grabiner

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grabiner
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Re: Massive tax refund/changing tax info

Post by grabiner » Thu Sep 14, 2017 10:12 am

retiredjg wrote:
Thu Sep 14, 2017 10:03 am
You can see how much you have had withheld in the past few years (from your W-2's) and just decrease that amount by filling out a new W-4 at work

It's been a long time, but I think you can tell them how many dollars to withhold rather than doing it by filing status and number of dependents.

For example, if you've been withholding $15k each year and getting back $10k....just have them withhold something like $6k instead of $15k.
The W-4 doesn't have this option, so you have to figure it out on your own. If you are in a 28% tax bracket and are getting a $10K refund, you divide $10K by .28 to see that you should have your tax withheld as if you earned $35,714 less, then divide that by the $4050 amount of one allowance to see that 8.82 allowances are worth $35,714. Thus you should claim either eight or nine more allowances in this situation.
David Grabiner

kaneohe
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Re: Massive tax refund/changing tax info

Post by kaneohe » Thu Sep 14, 2017 10:15 am

retiredjg wrote:
Thu Sep 14, 2017 10:03 am
You can see how much you have had withheld in the past few years (from your W-2's) and just decrease that amount by filling out a new W-4 at work

It's been a long time, but I think you can tell them how many dollars to withhold rather than doing it by filing status and number of dependents.

For example, if you've been withholding $15k each year and getting back $10k....just have them withhold something like $6k instead of $15k.
Doesn't quite work that way........... https://www.irs.gov/pub/irs-pdf/fw4.pdf

If you are underwithheld, you can tell them to take an additional amount /pay period. However if you are overwithheld, there is not a way to tell them to take less.........so you have to to somehow come up with conditions/allowances that underwithhold and then apply the additional amount.

rzk96
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Re: Massive tax refund/changing tax info

Post by rzk96 » Thu Sep 14, 2017 10:17 am

Just reading all this.... hurts my head. Ha.

Jack FFR1846
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Re: Massive tax refund/changing tax info

Post by Jack FFR1846 » Thu Sep 14, 2017 10:28 am

rzk96 wrote:
Thu Sep 14, 2017 10:17 am
Just reading all this.... hurts my head. Ha.
Add one more allowance and call it a day.
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retiredjg
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Re: Massive tax refund/changing tax info

Post by retiredjg » Thu Sep 14, 2017 10:43 am

Ok, Ok. Well, the good news is that I do get to do that in retirement!

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