Additional salary and taxes impact on withholding
Hi Terry, Last Year we had to pay federal taxes $3000. With my husband’s increase in salary this year(last year‘s income was 195K, this year about 230k)and I just started working so my additional salary(95k) what can we do so we don’t have to pay so much When we file taxes? We will be losing some child credit as well my son is 18 and my daughter will be 17 in September. I am deducting an extra $75 per weekly paycheck for taxes (w-4). Any help would be greatly appreciated. Thank you!
Terry Says
You need to sit down with your accountant now — before the end of the year — and discuss your total income and the amount that is being withheld. You need to have withholdings of at least the amount you paid in last year, or 90% of this year’s tax liability. And you don’t want to get a tax balance due in April — especially likely if you’re losing some deductions. Aside from that, you’re in the middle class tax trap — you only get the standard deduction of $25,900 for 2022. And the cap on deducting state and local taxes is $10,000 — even for married couples filing jointly.
NOW is the time to do some tax planning with your accountant.
