Configuring withholdings with a large raise and new job

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MindBogler
Posts: 692
Joined: Wed Apr 17, 2013 12:05 pm

Configuring withholdings with a large raise and new job

Post by MindBogler » Thu Dec 06, 2018 8:55 pm

I will be starting a new job before the end of the year which includes a substantial raise, on the order of 70%. I see two ways to deal with configuring my withholdings:

1. Leave them as-is for the year, as it doesn't change 2018 much, and run the 2019 calculators when available.
2. Forecast withholdings required for all of 2019 and configure the new value up front.

I know that Turbo Tax and the IRS maintain withholding calculators, but these are based on changing your withholding on today's date in order to arrive at a near-zero tax due by year end. However, that doesn't assist with configuring withholding for the next year. If I use these calculators and enter the new income and $0 for taxes paid I can get a reasonable estimate of the total tax burden for the next year. Given this information, how could I arrive at the correct withholding for 2019? I will be taking the standard deduction in a MFJ, dual-income household. Is there a simple formula to derive the correct W-4 withholding, some program or online calculator which will do this for me, or do I simply need to wait until 2019?

Globalviewer58
Posts: 495
Joined: Fri Jul 18, 2008 3:26 pm

Re: Configuring withholdings with a large raise and new job

Post by Globalviewer58 » Thu Dec 06, 2018 9:04 pm

When you begin the new job ask for Form W-4 (2018) and complete. This should give your employer the info to withhold an appropriate level for the balance of 2018 and 2019.

MindBogler
Posts: 692
Joined: Wed Apr 17, 2013 12:05 pm

Re: Configuring withholdings with a large raise and new job

Post by MindBogler » Thu Dec 06, 2018 9:13 pm

Globalviewer58 wrote:
Thu Dec 06, 2018 9:04 pm
When you begin the new job ask for Form W-4 (2018) and complete. This should give your employer the info to withhold an appropriate level for the balance of 2018 and 2019.
Thanks, sometimes the obvious things can be hard. I guess I haven't filled out the full W-4 form and worksheet in a long time but that worked great. Too easy!
:sharebeer

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