This is in the “it’s been too long and I’m too afraid to ask” category.
In 2024 I filled out several W2s for my jobs. (Substitute teaching in several districts.) For some of them I apparently elected to have no federal withholding, which I am now realizing as I’m starting to file my taxes. Every time (and I mean eeeeevery time) I fill out a W2, I have no idea what to put on the withholdings box. Even googling it wasn’t helpful. So I guessed, and this time I guessed “wrong” (I would have preferred to have taxes withheld, rather than owe later). This is the part at the top of the form where you have to enter a 0, 1, 2, etc based on your household. (???)
Does anyone have a concise way to explain how to choose the number here?
It’s too late to do anything about it now, but I’m hoping that by asking this question I can know for the future what to do.
They have a new version now that’s WAY better and has real numbers instead of binary. You can change your withholdings for your jobs based on it (just email HR/accounting). I usually withhold at the higher single rate despite being married because of the multiple freelance jobs, and that evens out.
Use this and it will tell you exactly what to put in your elections. Let me know if you’re confused.
ETA this is complicated AF and is sadly not a super basic question.
Hmm thanks! I’ll have to get my spouse’s payment info to fill that out.
But to clarify–the feds withhold at a higher rate for single people than for married people? is that correct? Also… why? Weird to me that it depends on the size of the household and not just the income.
Because there’s different tax rates for different household sizes and types (like Head of Household being the best if you’re a single parent)! You’re considered one tax person when you file Married Filing Jointly, but you have X number of household members. Here’s the breakdown based on income.
ETA: there’s also “head of Household” and “qualified surviving spouse” - if you were married filing jointly and your spouse died, you get 2 years after they die where you get to still essentially be married filing jointly before you go back to being “single”
It depends on a lot of different things about household size/composition but here’s the jist of the “marriage penalty” - in my case we have an unequal household income distributions so I’m actually a tax break for my spouse because my income is significantly lower than their income
It’s actually useful for me right now because I’m prepping for a story on free tax preparation services So thanks.
Also I’ve been a certified tax preparer for over a decade and I have to tell you this stuff is very confusing and changes constantly so being confused just makes you the same as everyone else
I appreciate this info! I owe a bit this year when I was not expecting to, as I have two W2 jobs and one is varied income so it is really hard to know exactly what’s up.
I was able to ask my one manager to withhold a little extra — I was able to have her adjust by a specific dollar amount each paycheck — so hopefully next year will be a more pleasant surprise. I didn’t know I could make the adjustment I did until I asked her basically the same question you asked above
Thanks for the link to the calculator, Lily! I adjusted mine to hopefully account for the business. Had to pay $3 of underpayment estimated tax penalty this year. Can’t be having that.
So thanks.