Taxpayer asks:
If my w2’s for the year are still at single but I am married can I file single or should I file married. Is it true that if my w2’s are at single they are pulling more money and if I file married I’m not getting back what I should?
It never dawned on me that I needed to change my w-2’s
Thank you for your help.
taxgirl says:
Easy answer first: you file for the tax year based on your marital status as of the last day of the year. It makes no difference what appears on your payroll forms.
You’re right, though, to note that your marital status may affect your withholding. Your form W-2 reports withholding (as well as wages and benefits) for the tax year. The amount withheld is calculated using information that you provide on a form W-4 (downloads as a pdf).
The point of the form W-4 is to figure out how many allowances to claim for purposes of your federal income tax withholding. The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number, you’ll have less taken out. If you do it right, you won’t owe or be owed: the absolute best scenario from a tax planning standpoint is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
If you’re married, you generally add “1” when figuring your allowances.
In addition, you usually add one allowance for each dependent. There are some exceptions to these general rules. You can make adjustments to your allowances for any number of reasons, including having dual wage earners in one family, if you claim certain kinds of credits or if you plan to itemize your deductions. If you’re not having enough withheld (meaning you owe too much at tax time), you can adjust the number of allowances down (meaning you’ll claim fewer allowances). If you’re having too much withheld (meaning that you tend to get a large refund), you can adjust the number of allowances up (meaning that you’ll claim more allowances).
If you’re not sure what to claim, ask your tax professional or give the IRS withholding calculator a whirl. You’ll need to have the following info handy:
- Marital status for the tax year
- Number of dependents claimed on your return during the tax year
- Info about child care expenses paid during the year
- Amount of wages earned during the year and amounts withheld (including frequency of pay – best to have a recent pay stub handy)
- Specifics about your itemized deductions, if you itemize
If you plug in all of the info, the calculator will estimate your anticipated tax (or refund) due for 2012, as well as recommendations for increasing or decreasing your allowances.
If you think you need to change your allowances, you’ll want to contact your HR folks or payroll department at your workplace.
Most taxpayers don’t have to update their forms W-4 very often. I suggest running the numbers every other year unless circumstances warrant more often. If any of the following happens to you, consider an update:
- You receive a large refund and expect the same for the next tax year;
- You owe a significant amount to IRS and expect the same for the next tax year;
- You get married or divorced;
- You have a baby, adopt a child or lose a child;
- Your child or children go away to college or move away from home;
- You buy or sale a home;
- You retire;
- You inherit a significant amount of money;
- You cash in stock options;
- You file for bankruptcy; or
- You change jobs.
This list is by no means exhaustive but should be a good start. If you’re not sure, it never hurts to ask your tax professional or check the withholding calculator.
Hopefully, that helps… and congratulations on your new marriage!
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
