Tax Withholding Increase
April 28th, 2009
Question: What should my allowance be on W4 to increase my Tax Withholding?
I’d like my withholding of Federal income to be about 15% of my taxable income. Currently 10% is being deducted. This way I’ll have a forced savings at the end of the year. I’m single. I think I put down 1 allowance for me only. What should I enter for allowance in order for my withholding to increase to 15%. Assuming 1 job. Are there any tax accountants out there?
Answer: I don't deal in Allowances when im advising clients what to have withheld from their checks. It is fuzzy math. Ask your employer if they will withhold a percentage for federal, safest way if you work a lot of overtime, so if you make more that week they take out more. Or you can set an amount to be withdrawn each week. Decide how much more you want withheld and divide it by 52 assuming you get paid weekly. This is a forced savings.....but you aren't earning anything for this. If your employer offers it direct deposit into a savings account or IRA or 401k is a better way to manage the money if it is possible for you. Good luck!
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