Medicare and Social Security taxes are withheld at flat percentages of your earnings. You cannot adjust them so fewer taxes are withheld from your paychecks. The same goes for state income tax withholding in some states. Federal income tax, however, is adjustable. The withholding depends on various factors, including the filing status and number of allowances you claim on Form W-4. If your budget requires more take-home pay, it's possible to adjust your withholding.
Review lines A through G of your current W-4 to see if you claimed all the allowances that you qualify for. Each allowance gives you a sum which reduces the amount of your wages that are subject to taxation; the more allowances you claim, the less tax you pay.
Claim additional allowances on a new W-4, if applicable. For example, if you recently had a baby and your spouse won’t claim her on his W-4, claim her as a dependent on line D of the form. Make sure you qualify for the allowance before you claim it. If don’t qualify for it but still claim it, you’ll owe federal income tax when you file your tax return.
Take advantage of the allowances that married people are generally entitled to. For example, if you meet IRS child or dependent care expense requirements, claim an allowance on line F. If you’re eligible for the child tax credit, claim the respective number of allowances on line G. If you intend to claim income adjustments or itemize deductions on your tax return, complete the Deductions and Adjustments Worksheet on page 2 of the W-4; this process reduces your withholding.
Add up your allowances and put the total on line H.
Include your filing status on line 3 of the Employee’s Withholding Allowance Certificate section. If you check “Married,” you will be taxed at the reduced married rate. If you check “Married, but withhold at higher Single rate,” you will be taxed at the greater single rate. Select the former if you’ll be filing a joint tax return with your spouse. Choose the latter if you plan to file separately. Since you want more take-home pay, it might be best to choose “Married” and file a joint return with your spouse.
Transfer the total allowances from line H to line 5. Sign and date the withholding allowance certificate. Give it to your employer in time for the pay period that you want the change to happen.
- Sometimes, married filing separately might be best, such as if you have large medical expenses that are not reimbursable. You cannot deduct medical expenses from your tax return unless they exceed 7.5 percent of your adjusted gross income. It’s harder to make that threshold if you claim you file jointly, as this requires you to combine your income with your spouse’s.
- If your state uses a withholding system that is comparable to federal income tax, adjust the allowances on your state tax form so that less money comes out of your paychecks. As with federal income tax, ensure that you qualify for the allowance before claiming it.
- Comstock/Comstock/Getty Images