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How to Lower Federal Tax Withholdings if Using Standard Deduction


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Starting a new job can be both exciting and overwhelming. There are so many new things to learn and adjust to, including your paycheck and taxes. It's not uncommon to feel confused or concerned about the amount of federal tax being withheld from your paycheck, especially if it seems too high. This can be even more concerning if you have calculated that you will receive a significant refund next year. So, how can you lower your tax withholdings if you are using the standard deduction? Let's break it down.

The Importance of Proper Tax Withholdings

Before we dive into how to lower your tax withholdings, it's essential to understand why it's important to have the proper amount withheld from your paycheck. Tax withholdings are the amount of money that your employer takes out of your paycheck and sends to the government on your behalf. This is done to ensure that you are paying your taxes throughout the year, rather than owing a large sum at tax time. If too much money is withheld, you will receive a refund. On the other hand, if too little is withheld, you may end up owing taxes when you file your return. It's crucial to have the right balance to avoid any surprises come tax season.

Factors Affecting Withholdings

There are several factors that can impact the amount of federal tax being withheld from your paycheck. These include your filing status, number of allowances claimed, and any additional income you may have. In your case, you state that you are married filing jointly with no other income and are taking the standard deduction. This means that your tax withholding will be based on your taxable wages and the tax brackets for married filing jointly with the standard deduction.

Calculating Your Withholdings

Based on the details you have provided, it seems that your federal tax withholding is around 17% of your taxable wages. This may seem high, but it's essential to remember that it's not the only tax being taken out of your paycheck. Other taxes, such as social security and Medicare, are also being withheld. This is why your overall tax rate is closer to 29%. Your state tax withholding is also based on your taxable wages and the tax brackets for your state.

It's essential to note that the tax brackets and rates can change each year, so your withholdings may vary. Additionally, if you have any additional income or deductions, this can also impact your withholdings. It's always a good idea to consult with a tax advisor to ensure your withholdings are accurate for your specific situation.

Lowering Your Withholdings

If you feel that your federal tax withholdings are still too high, there are a few steps you can take to lower them. The first is to adjust your W-4 form with your employer. This form is used to determine your tax withholding, and you can update it at any time. By increasing the number of allowances you claim, your withholdings will decrease. However, be cautious when doing this, as it can result in owing taxes at the end of the year if not done correctly.

You can also choose to have additional money withheld from each paycheck to cover any potential tax liability. This is known as voluntary withholding and can be helpful if you have other sources of income or are self-employed.

Consult with a Tax Advisor

It's always a good idea to consult with a tax advisor when making any significant changes to your tax withholdings. They can provide personalized advice and ensure that any adjustments you make are in your best interest. A tax advisor can also help you plan for your taxes and make any necessary changes throughout the year to avoid any surprises.

In Conclusion

In summary, if you feel that your federal tax withholdings are too high, there are steps you can take to lower them. However, it's crucial to understand the factors that affect your withholdings and consult with a tax advisor before making any changes. With the proper planning and adjustments, you can ensure that the right amount of tax is being withheld from your paycheck, avoiding any surprises come tax season.