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What am I supposed to adjust so I get less taxes back at the end of the year?

I noticed in a couple of the tax questions people were saying to adjust something so you are getting less back in taxes but are also paying in less during the year so you have more in your pocket throughout the year. Well what am I supposed to adjust?

Here is what my taxes look like this year. We are getting $9443 back. $2000 I know is from child tax credit for my 2 kids and $600 is part of the economic stimulus from last year. My husband re-enlisted and we got his bonus in December. The bonus was $36,000 but they took out $9,000 in taxes so we actually got $27,000. The bonus is added in to our regular income on the w2 so it says we made $60,000 this year so we did not get the EIC.

What do I need to adjust on our forms so they are taking out less during the year and paying back less at the end of the year?

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Anonymous

Asked by Anonymous at 8:18 AM on Jan. 27, 2009 in Money & Work

Answers (5)
  • It's the W4 form that gets adjusted. Be careful, though, because it looks like the main reason for your big refund is the taxes they took out of the bonus. When an employee gets a bonus, the employer is required to withhold 25% for federal income tax, which is way more than what is withheld from a regular paycheck. If he had gotten $36,000 over the course of the year, he wouldn't have had so much taken out. The best thing to do if you want to adjust is to do the worksheet on the W4. It'll walk you through how many exemptions to claim.
    flmom321

    Answer by flmom321 at 8:27 AM on Jan. 27, 2009

  • Well and also be careful when changing your exemptions. My mom changed hers to three (which is what they have living in their home) and she had to pay! You would think it would just even out but it didnt. But on the other hand we claimed four (which is what we have) and we still ended up getting back over $5,000. Not really sure how all that works.
    Anonymous

    Answer by Anonymous at 9:10 AM on Jan. 27, 2009

  • Well last year we didn't get a bonus but only made $20,000 so we got the EIC and we still got back $7500 so I don't know...
    Anonymous

    Answer by Anonymous at 9:56 AM on Jan. 27, 2009

  • Its the W4 form. But I agree with the first post. It could be that because of the bonus, you had extra income and extra taxes that you don't normally have. DOn't let that fool you. Go by a previous year that was without a bonus and see how much you got back. We are getting back about $4k in federal but our state, we are barely breaking even, so I don't want to change it. We are already at 6.
    momofsaee

    Answer by momofsaee at 10:49 AM on Jan. 27, 2009

  • flmom321 is right about them taking more taxes out on the bonus, this happens to my husband every year, then we get a big refund. But remember in your case, there won't be another bonus so you don't want to reduce your withholding too much. The reason WHY you got so much back last year was because you qualified for the EIC. You won't know for sure if you will qualify for it next year so be careful.
    slw123

    Answer by slw123 at 12:35 PM on Jan. 27, 2009

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