How do I fill out a w4 if my salary every year changes due to overtime and hours?
My salary changes every year due to overtime and hours and I end up owing the IRS money every year. How do I fix this? Thank you!
Answers
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Hi TravisWorman,
Welcome to the community. That is a good question.
If you are working for the same company, then this generally is not an issue. Your company should be withholding taxes based on the W-4 you filled out, which will indicate your filing status and any dependents.
However, if you're married and your spouse works, that can make things a little more complicated.
Here are a couple things you can do. First, revisit your W-4 with your company and make sure it is correct. Second, ask payroll to withhold a set amount each paycheck in addition to the regular withholdings. If you overpay, you get a refund.0 -
okay what determines the extra amount to withhold? How do I figure out how much?
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Hello TravisWorman6891,
That is a good question. Keep in mind that you will be making an estimate. It isn't an exact science. The goal is to pay at least 90% of your total tax for the year or pay 100% of what you paid the prior year. That way you avoid the underpayment penalty.
For example, look at your tax due for 2025 and how much tax due you owed. Take that amount and divide it by the amount of pay periods you have. Use that extra amount as the amount to withhold.
The bottom line is you'll be making an estimate and doing your best to pay at least 90% of what your total tax will be in the current year, or 100% of the amount you paid the prior year [or 110% if you're a high-income earner]. If for some reason you don't earn as much this year and overpay, the overpayment will be refunded to you when you file.
Here is a link to an article on the Underpayment Penalty and making estimated tax payments:
Here is a link to the IRS for high-income earners:
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