What if employee wants more FIT withheld

Occasionally, an employee will submit a W-4 with a certain number of exemptions and ask you to have additional FIT withheld. You may withhold an additional fixed dollar amount, provided that the minimum required tax on the federal wage bracket or percentage method withholding tables has already been withheld.

You may not withhold a flat dollar amount, such as $100 per paycheck, or a flat percentage of tax, such as 10% of wages per paycheck. There are exceptions for supplemental wages. Flat amounts of withholding are not an option, regardless of the employee’s reason for requesting them. However, employees who want a specific amount withheld can review the graduated tables and adjust their withholding allowances and, if necessary, request an additional amount of FIT to obtain the total FITW that they want.

Problem: Peggy in your office is married, has one child and earns $25,000 a year. Because she will have mortgage interest of $5,000 this year, she wants to reduce his FIT far below the amount normally withheld from someone earning $25,000. What should you do?

Solution: Tell Peggy to complete the worksheet included with her IRS Form W-4 and to take as few allowances as she needs to bring his withholding in line with her estimated FIT liability for the year.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.