I'm a hospital based surgical specialist paid on a W2. My W4 was set at two exemptions as I was single (got married this fall). I'm now married with one dependent. Last year I had a refund of a couple thousand dollars so I felt I was spot on withholding wise. This year I've had a 20% increase in income pushing me into the highest tax bracket and early calculations on turbo tax have me owing around 25k! My payment model changed in that I am now completely on production which is a base salary plus a quarterly settlement distribution, i.e. my production salaray minus my base is paid out four times a year. Is it that payment model which led to this? Just earning the extra money and jumping tax brackets shouldn't have done this right? Did I reach some income level where I should have been doing something different tax-wise?
More importantly, what's done is done, how do I avoid this going forward? I found an IRS calculator that has you input your withholding YTD and your last paycheck and it tells you what to put on your W4. That calculator assumes you're paying the same in tax on each check, but my checks are all different. I get paid twice per month. Call pay is only the second check of the month. Then every third 'end of month check' has the production settlement. I just changed my W4 to zero exemptions to get the most tax withheld but owing that much I'm not sure that will even do. Can I ****************************** out our payroll people for screwing me somehow (yes this is what I REALLY want to do)? Do I need an accountant? Do I need to wait until Jim finally finishes his tax book? Just take the tax I owed this year and divide it by how many paychecks I get and just have them withhold a static amount?
More importantly, what's done is done, how do I avoid this going forward? I found an IRS calculator that has you input your withholding YTD and your last paycheck and it tells you what to put on your W4. That calculator assumes you're paying the same in tax on each check, but my checks are all different. I get paid twice per month. Call pay is only the second check of the month. Then every third 'end of month check' has the production settlement. I just changed my W4 to zero exemptions to get the most tax withheld but owing that much I'm not sure that will even do. Can I ****************************** out our payroll people for screwing me somehow (yes this is what I REALLY want to do)? Do I need an accountant? Do I need to wait until Jim finally finishes his tax book? Just take the tax I owed this year and divide it by how many paychecks I get and just have them withhold a static amount?
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