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2020 W-4 advice

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  • 2020 W-4 advice

    Hi, surprised this hasn't been discussed yet!

    For this year's 2020 W4, I want to make sure I get as close to zero during tax day as possible. I am also a novice at taxes, so sorry for simple questions!

    I am married, both are physicians. No children yet.

    Me: Income, about 300K base, but get 90-100K annually for on-call money, so around 400K annually. I get the full amount (56K) from employer into 401k, I don't contribute anything, so I can't deduct any of this.

    Her: Income about 350K, she puts in 38K total into both 403b and 457, and 6K into HSA.

    I am selecting in Step 2, option C because we are both working spouses: "If there are only two jobs total, you may check this box. Do the same on Form W-4 for the other job. This option is accurate for jobs with similar pay; otherwise, more tax than necessary may be withheld"

    I suppose this is similar to the prior w-4, "married but withhold at higher single rate," correct?

    I tried IRS tax calculator to get a more accurate result but am having a tough time with it. I suppose the reason being is our paychecks vary a lot from month to month. Depending on how much on-call I take, and depending on her bonuses, our paycheck fluctuates on the order of 3-6K federal income tax withheld. Because of this, I can't get a good sense of how much tax is being withheld. This calculator seems better for people with same amount of tax withheld each paycheck, people with more steady incomes.

    Any suggestions on the IRS tax calculator? Should I just stick with option C?

    Lastly to clarify, both of us (my spouse and I) should mark option C on both of our separate w4's correct?

    Thank you all

  • #2
    https://www.whitecoatinvestor.com/fo...081#post177081

    calculator linked there where you can at least see the results that will come out based on how you complete the W4 which in the end is what is most important

    Comment


    • #3
      If you get bonuses during the year, it's going to be pretty difficult to calculate what to withhold at the BOY to come out "even", especially with 2 HIPs. I'd recommend overwithholding (M but w/h at S) the 1st 6 mos then running a projection using online tax tables to see where you stand and adjust withholding for the last 1/2 of the yr.
      Financial planning, investment management and CPA services for medical professionals | 270-247-6087

      Comment


      • drlaomd
        drlaomd commented
        Editing a comment
        There is no option of M but w/h at S on 2020 form. Do you mean to just check step 2 option C?
        This is essentially equivalent to married but w/h at higher single rate? Thank you

    • #4
      i compare quarterly to expected numbers and change if needed.
      some also under withhold the entire year then max out their W4 the last few months.
      tweaking happens.

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      • #5
        I also have variable income, variable bonuses, a spouse with variable income, and six figure investment income which is, you got it, variable. I hate the w4. Why don't they just give me the option of withholding x percent? Or x dollars (my safe harbor amount)?

        Comment


        • #6
          Originally posted by FIREshrink View Post
          I also have variable income, variable bonuses, a spouse with variable income, and six figure investment income which is, you got it, variable. I hate the w4. Why don't they just give me the option of withholding x percent? Or x dollars (my safe harbor amount)?
          Too easy. Next suggestion?

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