How to withhold taxes during FMLA/Short Term Disability

ddwonderwolf
ddwonderwolf Member Posts: 2 Newcomer
in General

Hi there, I'm receiving short term disability payments through my company. They are taxable, however, I was told I can change my withholdings by filling out a W-4 form. Unfortunately, my company nor the assisting leave company can not give me any advice or guidance on how to fill it out. The goal is to have as little taxes taken out as possible while on leave. I have been unable to get a clear answer by searching online. I am single with no children, employed full time with a yearly salary plus commission of between $60,000 - $79,000. Can anyone assist? I've learned I'll need to fill out a separate form for withholdings for my Louisiana state taxes as well. Any guidance on that too would be greatly appreciated. Thanks! Dawn

Answers

  • Henry
    Henry FreeTaxUSA Agent Posts: 166 image
    Hi ddwonderwolf, for your federal W-4, the best tool to use is the IRS Tax Withholding Estimator. It will walk you through your specific situation -- including your income, filing status, and any other income sources -- and tell you exactly how to fill out the W-4 to get as close to your desired withholding amount as possible. You can access it here:
    https://apps.irs.gov/app/tax-withholding-estimator

    For Louisiana state withholding, the form you'll need is the L-4 (Employee's Withholding Certificate). Here's how it generally works for someone in your situation:

    1. In Block A (filing status), you'll enter "1" since you're a single filer. This allows you to claim the single standard deduction, which reduces the amount withheld each pay period.
    2. Line 7 can be used to further increase or decrease the amount withheld per pay period -- you'd enter a negative dollar amount there if you want even less taken out.
    3. Once completed, you submit the form to your employer or the leave company handling your disability payments.

    You can find the L-4 form directly from the Louisiana Department of Revenue here:
    https://dam.ldr.la.gov/taxforms/1300(1_25)F.pdf

    One thing to keep in mind: while it's fine to reduce withholding, you'll want to make sure enough is being withheld overall so you don't end up with a large tax bill (or underpayment penalty) when you file your return. The IRS estimator tool mentioned above will help you find that balance.
  • ddwonderwolf
    ddwonderwolf Member Posts: 2 Newcomer

    Thanks so much, Henry. Appreciate you taking the time to respond. I’ll take a look at everything and go from there.

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