Taxpayer asks: I just changed jobs and I don’t know how many exemptions to claim for withholding. Help!
Taxgirl answers: This is one of those questions that is really fact specific: it depends on your individual circumstances. That said, since I’m getting a fair number of questions about withholding, I’ll attempt to pass some general information along.
- Check out the link to the IRS withholding calculator. It’s not a substitute for the federal form W-4 but it can help you figure out how many exemptions to claim.
- You need to consider your marital/filing status, number of dependents, pay frequency and pay amounts in order to complete the form W-4. If any of these things have changed since you started employment, you should submit a new form W-4.
- Local and state tax withholding are generally automatic – unless you are not a resident of the city or state where you work. If you are not, you should check the individual rules to determine what you will need to file in addition. For example, if you live in Philadelphia but work in Wilmington, Delaware, you are still subject to the City Wage Tax even if it is not being withheld; conversely, if you live in Wilmington, Delaware but work in Philadelphia, you are subject to the City Wage Tax which will likely be withheld for you at the employer level. Despite the loud grumblings about wage taxes in cities like New York City and Philadelphia, a large number of smaller municipalities and townships have similar taxing schemes – check with your employer to see what’s being withheld and check with your local government to find out how your local taxes work.
- If you have special circumstances, you may also want to check out IRS Publication 919, available on the IRS web site.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
