Getting married later - Change W-4 now?

[Chessic_Sense]

It’s roughly two months until the wedding, and I’m reading online that if I’m married on December 31st, then the IRS says I’m married for the whole 2011 tax year. That makes sense to me, since I’ve never seen a place to split out taxes by quarter on the 1040.

Doesn’t that mean that I should be claiming married status and a second dependent on my W-4 to take advantage of the marriage bonus I’ll surely be getting? I want my money now, not in April.

It’s legal (or even proper) to claim married status before I’m actually married, isn’t it?

[FatBaldGuy]

You can claim any number of deductions on your W-4 with no legal penalty. The only consequence is on April 15th, if the amount deducted isn’t enough to cover your taxes you need to be prepared to cough up the extra.

[muldoonthief]

If you’re going to do that (and I have no idea of the legality of doing it before you’re married), make sure your soon-to-be-spouse changes his/her withholding at the same time. There’s a whole worksheet on the back where you adjust withholding based on the salaries of each person.

[Chessic_Sense]

@muldoonthief

If you’re going to do that (and I have no idea of the legality of doing it before you’re married), make sure your soon-to-be-spouse changes his/her withholding at the same time. There’s a whole worksheet on the back where you adjust withholding based on the salaries of each person.

She doesn’t make any money at all. That sucks in its own right, but it’s great on my taxes!

[suranyi]

@FatBaldGuy

You can claim any number of deductions on your W-4 with no legal penalty. The only consequence is on April 15th, if the amount deducted isn’t enough to cover your taxes you need to be prepared to cough up the extra.

Absolutely correct, but with this caveat: If the amount withheld over the course of the year is significantly short of of the total tax due, you may owe penalties and interest. So I wouldn’t claim deductions on the W-4 randomly. At least put a little thought into it. The IRS worksheet usually gets you close enough.

[Alley_Dweller]

@FatBaldGuy

You can claim any number of deductions on your W-4 with no legal penalty. The only consequence is on April 15th, if the amount deducted isn’t enough to cover your taxes you need to be prepared to cough up the extra.

Publication 505

Penalties

You may have to pay a penalty of $500 if both of the following apply.

*You make statements or claim withholding allowances on your Form W-4 that reduce the amount of tax withheld.
*You have no reasonable basis for those statements or allowances at the time you prepare your Form W-4.

There is also a criminal penalty for willfully supplying false or fraudulent information on your Form W-4 or for willfully failing to supply information that would increase the amount withheld. The penalty upon conviction can be either a fine of up to $1,000 or imprisonment for up to 1 year, or both.

These penalties will apply if you deliberately and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. A simple error or an honest mistake will not result in one of these penalties. For example, a person who has tried to figure the number of withholding allowances correctly, but claims seven when the proper number is six, will not be charged a Form W-4 penalty. However, see chapter 4 for information on the penalty for underpaying your tax.

§ 6682. False information with respect to withholding

(a) Civil penalty
In addition to any criminal penalty provided by law, if—
(1) any individual makes a statement under section 3402 or section 3406 which results in a decrease in the amounts deducted and withheld under chapter 24, and
(2) as of the time such statement was made, there was no reasonable basis for such statement,
such individual shall pay a penalty of $500 for such statement.

§ 7205. Fraudulent withholding exemption certificate or failure to supply information

(a) Withholding on wages
Any individual required to supply information to his employer under section 3402 who willfully supplies false or fraudulent information, or who willfully fails to supply information thereunder which would require an increase in the tax to be withheld under section 3402, shall, in addition to any other penalty provided by law, upon conviction thereof, be fined not more than $1,000, or imprisoned not more than 1 year, or both.

And, incidentally, you don’t claim “deductions” on a W-4. You claim “withholding allowances.”

[Alley_Dweller]

@Chessic_Sense

It’s roughly two months until the wedding, and I’m reading online that if I’m married on December 31st, then the IRS says I’m married for the whole 2011 tax year. That makes sense to me, since I’ve never seen a place to split out taxes by quarter on the 1040.

Doesn’t that mean that I should be claiming married status and a second dependent on my W-4 to take advantage of the marriage bonus I’ll surely be getting? I want my money now, not in April.

It’s legal (or even proper) to claim married status before I’m actually married, isn’t it?

It would technically be illegal to check the “married” box on your W-4 if you weren’t married at the time. You do have to sign the W-4 under penalty of perjury.

Whether you would ever be likely to get caught is an entirely different question which I shall not address.

The by-the-book procedure would be to continue withholding at the single rate until you are actually married. At that point you could file a new W-4 and re-calculate the withholding allowances to which you are entitled taking into account the (excessive) amount of tax withheld at the beginning of the year. People mistakenly believe that you should claim “exemptions” or “deductions” on your W-4. You claim “withholding allowances” which can be justifiably much larger than the number of exemptions you claim on your 1040. So you could claim a larger number of withholding allowances on your W-4 after you get married, but remember to decrease them again at the beginning of 2012.

You will probably find warnings on the internet about not claiming more than 9 withholding allowances. If you have justification for doing so, then do it. Those warnings come from the fact that most people on the internet have not caught up with the changes that happened in 2005. The IRS no longer requires employers to report employees who have claimed more than ten allowances.

[suranyi]

@Alley_Dweller

It would technically be illegal to check the “married” box on your W-4 if you weren’t married at the time. You do have to sign the W-4 under penalty of perjury.

But don’t forget that the IRS never even sees your W-4 form under normal circumstances. Only your employer does, and only to figure out your withholding. It’s not sent to the IRS unless they tell the employer to:
From here: http://www.irs.gov/individuals/article/0,,id=139412,00.html

“Employers are no longer required to routinely submit Forms W-4 to the IRS. However, in certain circumstances, the IRS may direct you to submit copies of Forms W-4 for certain employees in order to ensure that the employees have adequate withholding. You are now required to submit the Forms W-4 to IRS only if directed to do so in a written notice or pursuant to specified criteria set forth in future published guidance.”

So as long as you aren’t too greedy and aren’t deliberatly trying to commit fraud, there is zero chance of being charged for anything you say on the W-4.