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W-4 adjustment

Technical topics regarding tax preparation.
#1
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I haven't messed with the new W-4's until now.

Say client wishes to reduce total federal withholding for 2021 by $1,100 and is paid monthly, so monthly withholding should be decreased by $100 effective February 28.

W-4 provides a space for additional withholdings per pay period but I do not see a way to directly reduce by $100 per month.

Here is my thought, since client is in the 15% bracket enter $7,333 on line (b) as a yearly deduction.

Will the payroll provider then decrease the expected monthly income by $666.67 (7,333 /11) for the remaining 11 months, and decrease withholding monthly by 15% of that amount which rounds off to $100?

Or if a negative $100 is entered as additional withholding will the payroll provider pick that up as a $100 decrease?

Has anyone here dealt with this?

Am I making any sense?
 

#2
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22-Apr-2014 5:22pm
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Upstate, NY
Respectfully, read the directions for the new W-4. All your questions will be answered. I find the new forms rather easy to get your client where they want to be. The worksheets are rather simple too.
 

#3
Frankly  
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kbairtax wrote:Respectfully, read the directions for the new W-4. All your questions will be answered. I find the new forms rather easy to get your client where they want to be. The worksheets are rather simple too.

Really? I've found the new W-4 to be an incomprehensible mess.
 

#4
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kbairtax wrote:Respectfully, read the directions for the new W-4. All your questions will be answered. I find the new forms rather easy to get your client where they want to be..


In a round about way.

There is no instructions on how to decrease by a fixed amount per pay period.

I used the tables from Pub 15-T to figure out where client is currently at per pay stub.

Then made an adjustment on step 4 line b of W-4.

Will throw it in the laundry and see what comes out.

BTW, meant to say 12% in my OP.

Thank you for your reply.
 

#5
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22-Apr-2014 1:34pm
Location:
North Carolina
I agree with Frankly, the new W-4 is a mess! I tried to help a client adjust his withholding. Could never figure out how to get it where we wanted it to be. We basically put in a number, will see what they withhold, and adjust again as needed. If you are trying to adjust other than the beginning of the year, or have other issues (which this guy had) such as large commissions the first paycheck of the month and only a small pittance of wages the other, the form just does not work. Could never even determine how the employer was coming up with the withholding they had been deducting.
 

#6
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văn phòng
It's almost necessary, in most situations, to use the IRS's withholding calculator online now:

https://www.irs.gov/individuals/tax-wit ... -estimator

Using it will tell you exactly what to enter on the W-4 and will remove a lot of the mystery.
 


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