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The IRS instructions for completing Form W-4 to calculate your allowances does not account for all possible situations. See the IRS information below relating to withholding.

Per IRS Publication 505 Tax Withholding and Estimated Tax:

Getting the Right Amount of Tax Withheld

In most situations, the tax withheld from your pay will be close to the tax you figure on your return if you follow these two rules.

  • You accurately complete all the Form W-4 worksheets that apply to you.
  • You give your employer a new Form W-4 when changes occur.

But because the worksheets and withholding methods don’t account for all possible situations, you may not be getting the right amount withheld. This is most likely to happen in the following situations.

  • You are married and both you and your spouse work.
  • You have more than one job at a time.
  • You have nonwage income, such as interest, dividends, alimony, or unemployment compensation.
  • You will owe additional amounts with your return.
  • Your withholding is based on obsolete Form W-4 information for a substantial part of the year.
  • You work only part of the year
  • You change the number of your withholding allowances during the year.
  • You are subject to Additional Medicare Tax or NIIT. If you anticipate liability for Additional Medicare Tax or NIIT, you may request that your employer withhold an additional amount of income tax withholding on Form W-4.

If you do not have enough tax withheld, you may have to pay estimated tax. See chapter 2 of Publication 505 for additional information about estimated tax payments.


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