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Posted by Sallymae on March 7, 2008, 9:45 pm
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I have some questions that hopefully somebody can shed some light.
1. On my W-4, do I use my wage basis as my salary minus my 401k / 403b
contributions? For example, if I make $27k annually and contributed
$5k to my 401k / 403b, do I base my wage as $22k?
2. Lets say my spouse makes $65k annually. On his W-4, he took an
additional deduction of $120 after doing the calculations on the back
(2 Wage Earner Household). Do I also add a $120 deduction on my W-4?
As a side note, it seems that with both of us working, we're only
bringing in an additional $300 or so a month compared to him just
working by himself. It just doesn't make sense to me. Just because I'm
working now, his paycheck's tax deductions doubled. I don't think an
extra $300 a month is worth the stress that I go thru.
Can someone help make some sense with the tax numbers for me?
When our household was only making a gross of $65k annually, his taxes
liabilities were lower. I expected it to go up when I started working,
but doubling the amount of tax liabilities is just crazy. I mean if I
bring in an extra $27k gross, our combined salary should be $92k gross
annually. But why is it that our combined net wages per month are only
about $300 more than before? Are there some other ways that we can
reduce our tax liability?
Thanks!
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