Post # 1
So I got married in October. I want to go ahead an submit my W-4 with my new name. Question are:
1) Does it make sense to do this now, at the end of 2010?
2) In section 3 of the W4, they ask you to check “single”, “married”, or “married, but withold at a higher single rate”. Question is…what is the difference between the last two options? I’m not sure which to choose (I’m embarrassed, but I need to learn about taxes and such…this is like another language to me)
3) Last, I assume my husband has to update his W4 also, even though his name doesn’t change…but just to check off new option for question 3????
Your help is greatly appreciated!
Post # 3
You should submit a new W4 for next year. You probably don’t want to withhold at the higher single rate unless you have a lot of other income so you and your husband would probably be fine with just doing the married. The best thing to do is have the person who makes the most money have all the exemptions that you qualify for and the other partner take 0. That way you won’t end up having too much taken out.
You probably had too much taken out this past year but there isn’t anything you can do about that now.
If you have any questions, feel free to ask me (I do taxes).
Post # 4
Yes – thanks..I do have more questions!!!
Ok, so the W-4 I have in front of me says 2010. Are you saying I should wait to do the 2011 one? Can I get that in the beginning of January? I’m confused as to why HR gave me this one, if it’s not the correct one.
Second, you’re saying we should BOTH do a new W4, and just select “married” in section 3. Is this right?
Last, because I make a bit more than him (nothing major though), you’re saying I should have more exemptions. From looking at the first worksheet, I’d enter 1 for myself (as nobody can claim me as a dependent). Should I also enter “1” for him, or leave it as “0”?
And then your’e saying on his W4…his total should be “0”?
This is so confusing!!!
Post # 5
Also, what’s the difference from filing married with a joint return, or married with separate returns. Is one better than the other?
Post # 6
If each of you makes a large and roughly equal salary, it can be beneficial to withhold as “married but higher single rate.”
For whatever reasons, if you withhold as “married” there is an assumption somewhere in the system that one of you is a “breadwinner” and the other makes less. So less will be withheld vs. when you were both single.
But, if you both make roughly equal, “married” may not withhold enough and you will get a tax bill in April. This is because for some couples, the combined income pushes them into a higher tax bracket vs. where they each were as singles.
Post # 7
@luli29: They probably haven’t made a new one but that one will be fine. I’m sure it won’t go into effect until next year anyway since you probably aren’t going to be paid in the next few days.
Yes you both need the W4 and to put married. Since your salaries are pretty similar, I don’t think you will run across the problem of having too much withheld so you might want to just put a 1 on line A for both of you so you will have a total of 1 for each of you. (The PP is right that if you make similar incomes you might be in the “marriage penalty” zone and should consider the extra withholding.)
The difference between filing jointly and seperately is that you can’t take a lot of credits and deductions if you file seperately, plus you will probably end up being in a slightly higher tax bracket. It usually only works out if you have complicated circumstances or you want to keep things seperate from eachother. So you should file jointly.
Don’t forget to file your taxes this April as married since you were married at the end of the year.
Post # 8
Thank you very much.
We roughly make the same, but don’t have big salaries. He’s lower 30s, I’m upper 30s. Is it ok, in that case, to still just file “married” and not “married, but withhold at a higher rate”
And to confirm, on each of our W4’s, we should probably each have a total of 1?
Post # 9
You will be pretty close to going into the next tax bracket (the 25% bracket starts at 68,000 for 2010) but you might be okay doing just married. The IRS doesn’t charge penalities unless you owe over $1,000 in a year.
And yes, just do 1 on each of your W4s.
Post # 10
Super – you’re awesome MissAsB. I’ll try to learn how to start understanding this on my own!
Post # 11
I’m so glad someone else posted this because I’ve just realized my HR never really gave me a new W-4 after I got married, so I’m still listed as Single, 1. I’d rather have too much taken out at first than not enough, so do I really need to change it to married? Does it basically mean that they take out more since I’m listed as single? Can the government come out to get me?? (Haha…sorta)
Post # 12
Great post, I had a question too MissAsB! Can we file married even though we were married in September and weren’t married the entire year? (**may be a dumb question, but jw!!)
Post # 13
I had the same questions!?!? Different circumstances though. We make more than the average bear I think, so should I change it to holding at a higher rate?
Post # 14
@missjyc: I’m no accountant but I’m pretty sure if you were married at any point in 2010, you should be filing married for your 2010 taxes.
I’m also listed as Single, 1, on my company’s W-4 form. I asked them if I should change it or file a new form since marriage and they said they couldn’t answer that question for me (they weren’t allowed?). So…i haven’t done anything yet. It’s all very confusing!
Post # 15
If you were married at December 31st at 11:59…. you need to file your taxes rather Married Filing Jointly or Married. You can not file Single or Head of Household. YOur W-4’s are just so your company will know at what rate to tax your income. YOu can can be married & still elect to single on YOUR W4. They take out more money if you file single & zero…. I have seen some people take claim 12 exemptions on W-4 even though they have no kids just so they don’t get alot taken out of their check….BUT in the end when you file your tax returns it all comes out b/c unless you have 12 SSN’s for those exemption IRS will say “sorry”!
Hope that helped
Post # 16
Thanks MissAsB for all the great tips!
I have done tax prep in the past and agree with everything that has been stated here!