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Allowances in W-4

IRS recommends claiming all your cumulative allowances on the W-4 for the highest-paying job, and claiming zero allowances on the other W-4 for married couple, both working, but the more allowances you claim, the less money is withheld from your paycheck. So, it seems not fair to me and has no sense. So, the person, who has higher paycheck, should pay less taxes?


  • Taxes are supposed to be fair?

  • Tax policies need to be changed and fair.

  • No doubt but who bells the cat?

  • rrupert
    rrupert ✭✭✭

    That's only a suggestion or recommendation. In our family we do it exactly opposite because it is MUCH easier for me to change my FIT withholding (since I am the HR manager) although I make less than it is for my spouse to find the right place on payroll/HRIS to make the change although he makes more. In the end if you file married jointly, the IRS doesn't care which person had which $ amount withheld.

    You could both claim M99 and have basically nothing withheld but you will owe BIG at tax time with possible underwithholding penalties. And then you could equally split that amount.

    As for who pays more out of their check? Honestly, you can figure out the total taxes being withheld from both checks, divide by 2 and then have the one reimburse the other for 1/2 if it really makes that much of a difference to you. And your post makes me glad that my spouse and I share finances rather than a tit for tat on things such as this.

  • d26k
    d26k ✭✭✭

    "IRS recommends" 'nuff said.

    The family should have a tax pro, who can help with W4 items (unless they are the lazy type of pro who gives a flat %). When my SWMBO was outside wage earning, we set her W4 to have no FWH or SWH so she felt like she was earning more. it was less of a "discussion" than to teach her how little extra she actually earned for the family, because of the amount I was earning. it was actually a money loser because of the extra costs, clothes, vehicle, etc.

  • It is amazing how many tax "professionals" actually have no idea what the IRS withholding rules are.

  • Actually, it may not be the tax professional who is telling them to have that amount withheld (or more accurately - the tax professional is probably not saying "tell your employer to withhold 14.3%") - The tax pro, if asked, may say "you are in the 22% bracket, but you don't really pay that much. That is the tax on the next dollar you earn. Last year your average tax rate was 14.3%." That is, if the conversation goes that far. Otherwise, there is usually a schedule in the tax return (and I am sure the self prep software does this as well) that tells the taxpayer both the marginal rate and the average rate for both state and federal taxes on the current return. This average tax rate could be translated by the taxpayer into "my tax preparer tells me I should have 14.3% withheld. Unless the taxpayer only has wage income nd only one job, that is not a very accurate way to determine how much to withhold.

  • d26k
    d26k ✭✭✭

    "my tax preparer tells me I should have 14.3% withheld"

    Actually, many preparers do give a flat rate for advice. Lazy @ss preparer providing accurate information which is entirely useless to their client. Proves the lack of training regarding the options an employee actually has on a W4 form. A quality preparer will charge for and provide accurate W4 advice.