How Do I Fill Out My W-4 When My Income Is Chaotic?

Speaker A00:00:37

You just got married, your work situation is changing, and now you're staring at a W4 form that assumes you got one job, one income, and a paycheck you can actually predict. But that's not your life right now, is it? You've got a job ending in August, another one starting in August, but no paycheck until September.You got an hourly summer gig, and your husband has two jobs on his own. So how do you fill out a W4 when you don't even know your full income yet? That's what we're breaking down on today's show.Very practical discussion today. Hello and welcome to Financially Confident Christian. Today we're going to talk about that W4 form and what to do when life makes it complicated.Because maybe you just got married, you got a work situation that's in flux, or your withholding needs updating before it gets messier. The form itself isn't hard. Knowing what to put with multiple jobs and uncertain income is the real challenge.Maybe you've got a question of yours as well. You can send me your question by going to financiallyconfidentchristian.com/questionWe'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/question. Well, let's get right to today's listener question.Hi Ralph, I'm completely lost on how to fill out my W4, and I'm hoping you can help me figure this out. I just got married and I need to update my withholding. On top of all that, my work situation is a mess right now.I've got a salaried job that ends in mid August and I'm starting a new teaching job in August as well. But I won't get my first paycheck until September. I'm also working an hourly summer job that I just started.My husband has a salary job he'll be at all year and an hourly job he'll work a rear round two. So between the two of us, we're juggling three jobs this year.Every website I've looked at just says fill it out and don't get it wrong, which really isn't helpful. How do we figure out the right withholding when we have many moving pieces and I don't even have a paycheck from my new job yet?Any guidance would be really appreciated. Thank you, Ralph. You know what? The truth is, these W4 forms are complicated. In the last few years, they've got even worse.But the W4 form isn't a test that you fail. Listen, it's just a tool to help you adjust. Use the best information you have and update it when things change. But let's get into some specifics.Let's talk about the W4 form and let's make today work. A W4 form is nothing more than telling your employer how much federal tax to withhold per each paycheck. It's really not that complicated.The goal of it is to get close to your actual tax liability so you don't have some huge tax bill or some big refund come April. It's just an estimate. So many people don't think. They think, well, this is professional government form. I can't make a mistake on it.It's an estimate. It's not permanent. And you can update it anytime life changes. You mentioned you got married. That's a time to change it.Maybe you just got your taxes done and your tax person said, hey, you owe a lot of money. That's a time to change it. But you don't have to fill out every section on the form. Just what applies to you.The main sections are your marital status, are you single, are you married, are you married? Filing single. Another component of that is multiple jobs. We'll talk about that in a minute.If you've got dependents, if you got other income, or you got credits. So let's start with your marital status. Step one on the form is super simple.You can select single or you can select married, filing jointly, or you can select married but withhold at the single rate. All of that is doing is changing the tax brackets so that your employer knows how much to withhold.If you're still on a single W4, you're probably over withholding at this point if you just got married. But it depends on your situation.So what I would do is call your payroll people, call hr, tell them, hey, I just got married and ask them to update your W4 form. It'll take five minutes. They've done that same thing hundreds or thousands of times now.If you're really confused by it, you can reach out to somebody like me, pay for a consultation or, or IRS actually has a pretty good W4 calculator. You can get that by going to irs.gov and it's really better than most of the third party ones I've seen.Again, the W4 is not this one time commitment. It's not like a tablet you chisel with stone. It's a living document that changes. You don't need all the answers to take the next right step.Now here's one of the things that makes it complicated, multiple jobs you mentioned already, you've got, you're moving from job A to job B and you've got a side job. Your husband has a job and a side job. The problem with that is each employer withholds based on their job.They're looking at not all the jobs combined. So what you could effectively have is more income putting you into a higher tax bracket that can cause under withholding.That's where this multiple job worksheet on, on the back of the EW4 can help you. But I'm going to be blunt with you as a professional.Sometimes it's simpler to just make sure you set the withholding on your main job to where you want it to be. And then for everything else, just mark it zero. That means they're going to withhold the max even if you're married market single zero.Yes, they're going to withhold more, but you're not going to get yourself in trouble. But maybe that's not even enough.Some of my clients, and like I said, I've been doing this for 30 plus years, you got to add some additional withholding. Maybe your tax preparer or somebody says, hey, add another $50 per pay in federal withholding or $100 of pay. If you know what that is.You can adjust that, but you don't want to claim full allowances on every job because that's going to lead to a tax bill, that one. Why step this week beats another week of avoidance? Here's the thing you can do. Estimate what you don't know yet. Plan to revisit it in September.What you said is, Ralph, I'm starting a new job in August. I don't know what this is going to look like. Don't stress about it. Once you get your new paycheck, take a look at it. It might be perfect.Don't need to change anything. If you do need to change it, then go back and change it. Then it's not a big deal.Estimate the summer job hours, think about how much income you're going to make. Sit down with your husband and put all these things together. Because that's the other side of this.If you just got married, you're going to probably be filing a joint tax return. That is the information that goes into the IRS calculator. Like I said, it's an informed estimate, but it's an estimate.It's not something that's carved into stone. It's not some blind guess either. So fill out the W4 now. With that estimate.But set a reminder for yourself in September or October, if you visit that by then you're going to have real paychecks from your teaching job. You. You can run the calculator again with actual numbers. This is the thing we do for our clients.In September, October, we take a look at, well, what if we filed your return right now? That way you don't have a big surprise. This is a great time to have that money meeting with your husband. Update both of your W4s together.Unfortunately, this is a thing I see causing a lot of stress sometimes in a relationship. I've had many clients where the husband said his W2 or W4 correctly and the wife didn't. And every. Every year they owe money.They sit down in my office and it's like a battle because one of them looks at the other and says, I thought you were going to change your W4. I thought you did change a W4. The problem is they still haven't made any corrections. So build a system that works.Because money is emotional before it's mathematical. Let's cut down the emotion. But I want to speak to something underneath this question.When you're juggling multiple jobs, when you're transitioning between employers and you're trying to figure out taxes before you even have a paycheck, it can feel like you're doing something wrong. Like you should have all the answers by now. But, friend, that's not how real life works. Life is messy, income is uncertain, and circumstances change.Being faithful doesn't mean having all the answers up front. It means making the best decision you can with what you have right now and. And then adjusting when you know more. That's not a failure.That's living in wisdom. You're not supposed to get your W4 perfect on the first try. Let me tell you right now, that form is confusing, but you're supposed to get it close.You're supposed to stay honest with the IRS and then update it when things changed. Because God sees your effort, he honors your integrity, and he isn't angry at you for needing to adjust it later. That's okay.You don't have to have your whole year figured out to take that next right step. So here's your win for today. And this is for anybody who is working a traditional W2 job.Update your W4 to change it if your circumstances have changed. Make sure you're not over withholding or under withholding. Yeah, it's not great to get a big refund. It feels nice.But the IRS has used your money on its own and you're not getting any interest on that. And revisit this once you have any changes in your income. You're not trying to solve everything today.You're doing the next right thing and then putting that together later on. Let's get to our Bible verse today comes to us from Proverbs chapter 21, verse 5.I've used this on the show probably a hundred times, but it's perfect. It says this the plans of the diligent lead to profit as surely as haste leads to loss. It's not about moving fast, it's about moving deliberately.So slow down, fill out that W4 as best you can, use the care, ask the questions and just plan to adjust it later. That's doing due diligence and that protects you both from overpaying and underpaying. How about we pray together?Heavenly Father, I want to pray for this listener and her husband as they navigate multiple jobs, changing circumstances and a new marriage paperwork all at once. You got a lot on their plea, Lord. Help them to feel less overwhelmed and give them clarity about what needs to happen first.Guide them as they fill out their W4 forms and help them to be honest about what they know and what they don't know and give them courage to update it when things change. Protect them from penalties and those April 15th surprises and and remind them that managing money well doesn't require perfection.It just requires patience and a willingness to adjust. And we ask this in Jesus name. Amen, friend. You're not behind in any of these things. You're asking the right questions and that counts.So go update that W4 to the best of your ability.Use that multiple job worksheet if you want to and take a look at that W4 estimator@irs.gov and if you've got a question for this show, I would love to hear your voice.You can record a voicemail for me by going to financiallyconfidentchristian.com/voicemail we'll put a link in the show notes and you just got to click on it and then tell me what's going on. I would love to hear your voice and answer your question again.You can get to that by going to financiallyconfidentchristian.com/voicemail thank you so much for joining me today. Stay financially savvy. May God bless you and you have a truly great day today.