W4 Question

[naednek]

In 2024, we activated our solar panels at our house, which meant we could claim the US credit in 2025. My wife's employer suggested at the time that if we wanted the credit sooner, we could technically change our withholdings so that Federal taxes were not taken out, and it would balance out. Well, it didn't balance out because our credit was more than our tax liability, so we got the rest of the credit in our 2025 tax return.

But now we need to change our W4 so that taxes are being deducted from my paycheck as we had claimed the entire credit. The problem is I have no idea what I should be inputting. It used to be you claimed 0-8 and those numbers determined how much money would be taken out of your check with 0 being the most.

However, the form now wants you to enter a dollar amount. I have an idea of the amount I need to be deducted per month, but I'm not sure where on the form to input it. I have used the IRS estimator, and it tells me to enter something like $1000 in the child dependent box, but everything says to leave it blank.

Why do they have to make things so confusing?

[Isgrimnur]

The dollar amount used to represent fine tuning. My return this year looks like a small payment, so I put $10 extra in the dollar field.

Looks like they changed the form for this year.

I would take what your amount due for 2024, subtract what you've paid this year, and divide the difference by the number of paychecks left and put that in the dollar amount. Alternately, change your withholding to what is reasonable, and extrapolate numbers after the next check.

TIP: Consider using the estimator at www.irs.gov/W4App to determine the most accurate withholding for the rest of the year if: you
are completing this form after the beginning of the year; expect to work only part of the year; or have changes during the year in your
marital status, number of jobs for you (and/or your spouse if married filing jointly), dependents, other income (not from jobs),
deductions, or credits. Have your most recent pay stub(s) from this year available when using the estimator. At the beginning of next
year, use the estimator again to recheck your withholding.

[naednek]

The dollar amount represents fine tuning. My return this year looks like a small payment, so I put $10 extra in the dollar field.

I would take what your amount due for 2024, subtract what you've paid this year, and divide the difference by the number of paychecks left and put that in the dollar amount. Alternately, change your withholding to what is reasonable, and extrapolate numbers after the next check.

do I put that in 4b? I'm not sure why I need to put $1043 in the
"Step 3:
Claim
Dependent
and Other
Credits "

[Isgrimnur]

If you don't exceed the standard deduction, 4b should probably be $0

[naednek]

If you don't exceed the standard deduction, 4b should probably be $0

Ok, so I should just do what the estimator is suggesting, putting $1043 in step 3?

I realize you don't have all my information, so I don't expect you to have an absolute answer. Before last year's change, I was paying about $590 a month in federal taxes. If we paid all year, that would be about $7,080 in federal taxes.

The estimator is saying this year it's expected that we would owe $8,871, Because we are 3 paychecks into the year, this would mean we would need $985.67 taken each month to break even. So should I be putting the $8,871 in Step 3 or do what the estimator says?

[stessier]

I'm sorry I can't help, but I will say I made a change last year using this form and it was a nightmare. Took 3 checks to get it correct.

[Isgrimnur]

I would go with the $985.67, then adjust based on paycheck #4.

Or talk to Henchperson Resources.

[naednek]

I would go with the $985.67, then adjust based on paycheck #4.

Or talk to Henchperson Resources.

Ya I guess that's another part where I'm confused. Do I put the annual number and where on the form do I put that.

[gilraen]

If you don't exceed the standard deduction, 4b should probably be $0

Ok, so I should just do what the estimator is suggesting, putting $1043 in step 3?

I realize you don't have all my information, so I don't expect you to have an absolute answer. Before last year's change, I was paying about $590 a month in federal taxes. If we paid all year, that would be about $7,080 in federal taxes.

The estimator is saying this year it's expected that we would owe $8,871, Because we are 3 paychecks into the year, this would mean we would need $985.67 taken each month to break even. So should I be putting the $8,871 in Step 3 or do what the estimator says?

Wait...step 3 is the amount to REDUCE the amount of taxes that is being taken out. It's the rough equivalent to the old number of dependents (the more dependents, the less tax gets taken out). If you put $8,871 in step 3, you will get less taxes taken out, not more.