Many healthcare professionals are employed based on the academic calendar, and therefore, switch jobs or employers around July 1st.? No matter when you change jobs, you need to submit a?W-4 form?with your new employer to determine how much taxes will be withheld from each paycheck.
There are definitely some major flaws associated with completing a W-4 form.? What seems like a very straightforward exercise in paperwork can often result in a surprisingly large overpayment or balance due when you file your taxes the following winter.
Here are a few of the underlying issues with the W-4 form:
- If you work for more than one employer, each employer withholds taxes as if they are your only employer.? Let’s say you work for 3 employers and earn $20k per employer.? In that situation, you will have significantly less taxes withheld than if you were to work for one employer and earn $60k.
- If you claim “married” on the W-4, each of your employers will withhold taxes from your salary as if your spouse does NOT work. And the closer your income is to your spouse’s income, the more money you might owe with your tax returns if you both claim Married with a few allowances on your respective W-4s.
Fortunately, our friends at the IRS have created an online tool known as the?IRS Withholding Calculator?to help you complete the W-4 in such a way that you should come close to breaking even on your taxes.? According to the IRS:
If you are an employee, the Withholding Calculator can help you?determine whether you need to give your employer a new?Form W-4, Employee’s Withholding Allowance Certificate?to avoid?having?too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill?out the form.
CAUTION: This Withholding Calculator works for most taxpayers. However, if you owe self-employment tax, alternative minimum tax, or certain Other Taxes; you should use the instructions in?Pub 505, Tax Withholding and Estimated Tax.
Tips For Using This Program
- Have your most recent pay stubs handy.
- Have your most recent income tax return handy.
- Estimate values if necessary, remembering that the results will be no more accurate than the input you provide.
Ready to start? Make sure Java scripting is enabled before using this application.
To?Change Your Withholding:
- Use your results from this calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate.
- Submit?the completed Form?to your employer as soon as possible.