How can I decrease my federal tax withholding?

Is there any way to decrease the amount of tax withheld from my paycheck? On my W-4 I already have 9 dependents-we have 4 children, just so we can keep more of our money from being withheld, and I believe that is our limit according to my accountant. We have only 1 income for a family of 6 people, and we are in the lowest tax bracket (15%), I already put 12% in our 401K and a large amount into an FSA for medical expenses. Due to the child tax credit, our refund is very large each year (over $5000!). Is there any way to keep more of our money each month instead of the government holding onto our money until we receive our refund?

How can I decrease my federal tax withholding?

You should be able to increase your W-4 allowances in order to reduce that year-end refund to a reasonable level.

Your accountant is referring to an IRS rule where an employer was required to forward W-4s claiming more than 10 allowances to the IRS. It%26#039;s not required anymore, but you should be prepared to provide proof because the IRS may ask your employer at some point to forward those W-4s.

A combo of your previous year%26#039;s return and the W-4 allowance worksheets where you calculated the max number of allowances you could take should be sufficient proof. But you should stick to what your accountant advises. After all, you%26#039;re paying good money for that advice.

How can I decrease my federal tax withholding?

You can add allowances until your withholding aproximates your ultimate liability. At your bracket each allowance reduces tax withholding by $525 per year or $20.19 per biweekly pay period.

How can I decrease my federal tax withholding?

Change your with holdings to exempt they will not take any taxes. The bad part about doing this is by paying no taxes you may end up with a bill.

Many people do this for 6 months out of the year so it kinda evens out.

How can I decrease my federal tax withholding?

Getting a $5000 refund each year IS proof that you could take more allowances. You could raise it a few more without having a problem. This asssumes that with the 9 you currently show, they are taking anything out for federal income tax - if they aren%26#039;t, then increasing the allowances wouldn%26#039;t make any difference.

If you are receiving EIC, you can also file a form W5 with your employer, and get some of that through the year also.