Changing Your Employee Tax Withholding Status after Marriage

Your employee tax withholding information is used by your employer to determine the amount of income tax withheld. You complete a W-4 form, which allows the employer to determine whether your income tax rate is 10, 15, 25, 28, 33 or 35 percent. The percentage of income withheld is going to be based on your filing status and exemptions.

If you are married, you and your spouse could end up paying more taxes than two individuals filing separately pay. This is due to the so-called marriage tax, which creates a greater tax burden on dual income earners than on any other category of filers. To minimize the impact of the marriage tax, contact your employer to obtain a new W-4 and update it by following these steps.

Use the Worksheet

Follow the instructions on the form for completing the W-4. The worksheet attached to the form can help you determine your new tax withholding status. You want to make changes that will shift more of the tax burden on the spouse with the higher income. The W-4 will help you determine what is appropriate for your situation.

Choose the Appropriate Number of Exemptions

Choosing too many exemptions will result in a large tax bill in April. Choosing too few will mean that you will end up paying more taxes during the year than necessary. An easy way to strike an appropriate balance of exemptions between you and your spouse is to take the difference in income between you and your spouse and divide it by $5,000. For example, if your spouse has an income of $100,000 and yours is $80,000, the difference is $20,000. Take the difference, divide by $5,000 and you will come up with 4, which is the number of exemptions you should take.

If you have any questions about making changes to your withholding, consult with the human resources or employment specialists in your company or talk to a qualified tax professional.
blog comments powered by Disqus