Using my paystubs up to 12/15, it looks like my wife and I overpaid taxes by $20k this year through withholdings from our paychecks. This is our first year out of school, so we don’t have previous filings to use as a guide. I’ve tried multiple tax calculators (H&R Block, TurboTax, etc.) and double-checked in Excel. Every calculation shows we’ve paid $20k more than what we actually owe, but the W-4 doesn’t seem to offer many options for adjustments (just filing status, jobs, and dependents).
I’d rather underpay and set money aside to pay later than get a big refund. Does anyone have advice on how to reduce monthly withholdings for 2025? Appreciate any tips!
When you used the calculator, did you only include federal income tax, or did you add FICA taxes too? How many months did you and your wife work this year? Also, sections 3 and 4 of the W-4 do allow adjustments, even if they seem limited.
I worked 12 months, and my wife worked 6. For the W-4, sections 3 and 4 seem to focus on dependents, other income, and deductions, none of which apply to us.
I worked 12 months, and my wife worked 6. For the W-4, sections 3 and 4 seem to focus on dependents, other income, and deductions, none of which apply to us.
FICA taxes aren’t the same as federal income taxes. You should exclude them when calculating your estimated income tax liability.
I worked 12 months, and my wife worked 6. For the W-4, sections 3 and 4 seem to focus on dependents, other income, and deductions, none of which apply to us.
You shouldn’t include FICA taxes in the calculator since they’re separate from income taxes. Double-check your numbers without them. Also, sections 3 and 4 on the W-4 can be used for any adjustments, not just for dependents.
@Ellis
Thanks for clarifying. I’ll revisit my calculations. For adjustments, can I just add dependents even if we don’t have any to reduce the amount withheld? Wouldn’t that look suspicious?
Pierce said: @Ellis
Thanks for clarifying. I’ll revisit my calculations. For adjustments, can I just add dependents even if we don’t have any to reduce the amount withheld? Wouldn’t that look suspicious?
The key is to adjust so your withholding matches your actual tax liability. It’s not about adding fake dependents but tweaking the numbers so you don’t overpay. Your wife working only half the year could explain some of the extra withholding.
I worked 12 months, and my wife worked 6. For the W-4, sections 3 and 4 seem to focus on dependents, other income, and deductions, none of which apply to us.
Your wife’s paychecks were likely taxed as if she worked the full year, which would cause over-withholding. That might explain part of the issue.
The IRS withholding calculator can help you adjust your W-4 for 2025. Since it’s already late in the year, you won’t see changes for 2024, but start fresh in January to tweak your withholdings.
Uma said:
The IRS withholding calculator can help you adjust your W-4 for 2025. Since it’s already late in the year, you won’t see changes for 2024, but start fresh in January to tweak your withholdings.
Good idea. I’ll check the calculator again in January. Thanks!