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W-4 Withholding?

Old 02-07-2018, 06:04 AM
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Default W-4 Withholding?

So I been thinking about this after recently doing my taxes. I have 3 sons but I have never changed my W-4 so my W-4 still says Married and 0. Is there any actual reason to change the W-4 and start claiming my children? Someone mentioned the IRS could penalize you for not accurately doing your W-4 form but I have found zero incidences supporting this idea so thought I would ask THT CPA's.
Old 02-07-2018, 06:13 AM
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If you have been receiving or will receive a refund you are having too much withheld. Conversely if you pay a significant amount or receive a penalty for underpayment you need to get more withheld.

Adjust accordingly...
Old 02-07-2018, 06:17 AM
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Originally Posted by olsaltydog View Post
So I been thinking about this after recently doing my taxes. I have 3 sons but I have never changed my W-4 so my W-4 still says Married and 0. Is there any actual reason to change the W-4 and start claiming my children? Someone mentioned the IRS could penalize you for not accurately doing your W-4 form but I have found zero incidences supporting this idea so thought I would ask THT CPA's.
I believe they can only penalize you if you don't withhold enough, but if you are getting a refund and I assume you are, you are good to go.

Changing your W-4 or not changing...up to you, Some people like getting a big refund and some people don't like loaning the govt money, which you are if you get a big refund.
Old 02-07-2018, 06:22 AM
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I do single 0, but realize I am letting the gov't use my money for the year. That said, I can count on a good $6-7k refund come Marchish when I complete my return.
Old 02-07-2018, 06:24 AM
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We fall in the standard deduction category and generally break even. Never owe.
Old 02-07-2018, 06:29 AM
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Yup, I have been claiming nonexistent children for years to make things come out close to even.

You are not really "claiming children" on this form. Children are one factor out of many that you use in the worksheet to calculate the number of Personal Allowances to declare. If you look at that worksheet they are telling you to add 1 for this or that situation or divide this by that and add the result. Even they are explicitly telling you it's a number that is not tied to a specific thing.

I wouldn't suggest touching it until you get a few paychecks with the 2018 tables being applied.
Old 02-07-2018, 07:02 AM
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I was never really concerned about owing them anything, I am married filing 0 and since having kids get a good bit back each year. I do believe I could be putting that money to better use than the government like bumping up IRA/401 etc but honestly its normally out of site out of mind and not something I ever felt needed to worry about. Because at some point if I do change it I will then have to revert back when they leave home and seems that tax year alot of people either forget about it completely and pay in the end or change it too early and the numbers are not quite right.
Old 02-07-2018, 07:02 AM
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Originally Posted by ronp364 View Post
Yup, I have been claiming nonexistent children for years to make things come out close to even.

You are not really "claiming children" on this form. Children are one factor out of many that you use in the worksheet to calculate the number of Personal Allowances to declare. If you look at that worksheet they are telling you to add 1 for this or that situation or divide this by that and add the result. Even they are explicitly telling you it's a number that is not tied to a specific thing.

I wouldn't suggest touching it until you get a few paychecks with the 2018 tables being applied.
I really wish they would come out with a version of the form that uses plain old math. Especially with the simplified text code going into place, that would be a much easier way to calculate it, especially for two earner households. Realistically, most Families have a good idea of what their household income is going to be in prior to the start of the year. At least with and 10 grand or so.
Old 02-07-2018, 07:59 AM
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IRS typically has a withholding calculator that works decent. It's currently unavailable as they are still updating it for the recent tax changes: https://www.irs.gov/individuals/irs-...ing-calculator
Old 02-07-2018, 08:04 AM
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Figure out what you total tax liability is for the year. If your W-2 withholding is your only tax payments, take that number and divide by number of pay periods. Adjust W-4 as needed to have that amount withheld.

Or you can use the worksheet on the W-4.

There is no 2018 W-4 as of now. No more exemptions in tax code.

I have a large deduction for AGI, (Alimony) and have a very large number of "exemptions" on my W-2. Still getting a refund this year. I over withheld!
Old 02-07-2018, 08:04 AM
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I claim 0 so I can let the gov't use my money.

I usually get multiple extensions so they have it for a really long time

I think of it as a favor to them, You know, just in case I need a favor from them sometime


I know its dopey, but I like getting a big refund instead of writing a check
Old 02-07-2018, 08:10 AM
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Originally Posted by Elusive View Post

I think of it as a favor to them, You know, just in case I need a favor from them sometime
Can I interest you in a bridge I own in Brooklyn? You can trust me. I'm not
like the others........
Old 02-07-2018, 08:29 AM
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My guess is the form will be changing quite a bit soon since they got rid of the deduction for person exemptions in the new tax bill.
Old 02-07-2018, 11:03 AM
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Maybe things have changed with the health insurance this year, but my accountant changed my withholding a few years ago so I would never get a refund so I would never pay the penalty for not signing up for healthcare.

Not sure if that is changed, but if you get a refund and dont have health insurance they can take your refund. Change it so you owe and they cant get you.

Im just a w2 person though. Im not the typical hull truther money wise. No idea if folks with money have same rules.
Old 02-07-2018, 03:48 PM
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Originally Posted by olsaltydog View Post
I do believe I could be putting that money to better use than the government like bumping up IRA/401
you answered your own question!

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