If you've ever held a job, you've probably filled out a Form W-4. This short little form might not look like much, but it tells your boss how much money to withhold from your paycheck, so it's worth the time to make sure you fill it out correctly. When you were single, your W-4 was pretty simple. The math gets a bit more complex for married couples.Depending upon the specific allowances you would like to take, you may decide that you should complete your W-4 using a variety of unique strategies and tactics.
TL;DR (Too Long; Didn't Read)
One of the most important suggestions for completing your W-4 as a married couple is to ensure that the last name listed on the paperwork reflects any changes made as a result of your marriage.
Why Make Adjustments
Even if the amount you had withheld from your paycheck when you were single was absolutely spot on, things change after you get married, including how your income is taxed. If you plan on filing a joint return, your tax rate will be lower. If you decide to file separately, your tax rate will increase. If you have too little withheld, you could be surprised by a big tax bill at the end of the year. If you have too much withheld, you'll end up giving Uncle Sam an interest-free loan.
When To Adjust
There are no rules or regulations that govern how frequently or under what circumstances you can fill out a new Form W-4. You have to fill out a new one any time you start a new job, but the Internal Revenue Service recommends you fill out a new Form W-4 any time you have a major life event, such as getting married, that can change your tax exemptions, deductions, dependents or credits.
Understanding Basic Adjustments
The most basic adjustment you should make when you fill out your W-4 as a married couple is line 2, Last Name. If one of you changed your last name, it is imperative that the name that you have on file with the Social Security Administration matches the name used to pay your taxes.
Otherwise, you might have problems with the IRS accepting your tax return. The next most basic adjustment is changing your marital status from Single to Married on line 3. You have a choice between checking the "Married" box or the "Married, but withhold at higher Single rate" box.
Adjusting Your Withholding
Form W-4 comes with a basic Personal Allowance Work Sheet that helps you determine how many allowances to claim. The rule of thumb is the more allowances you claim, the lower the amount of taxes withheld from your paycheck. You can typically take one allowance for yourself, another for your spouse and one for each of your dependents. But you can adjust the number of allowances down if you'd like to get a larger refund in the spring or increase it if you'd like more in your paychecks now.
Evaluating Complex Adjustments
If both you and your spouse work, or if you plan on itemizing your deductions, things can get complex quickly. You could spend a lot of time filling out the attached "Deductions and Adjustments Work Sheet" or the "Two-Earners/Multiple Jobs Work Sheet," but the IRS provides a dandy withholding calculator online that makes the process much easier.
Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.