Add together possible income tax deductions on the IRS W-4 worksheet, and then adjust for non-wage income, such as dividends and interest, to determine how much money your employer should withhold every paycheck, according to Bankrate. The W-4 worksheet helps calculate withholding allowances.Continue Reading
Find out what itemized deductions you may use when you file Form 1040, Schedule A. This number reduces your withholding, which means you get more money per paycheck from your employer. If you pay mortgage interest, real estate taxes, student loan interest and alimony, these items may be part of your itemized deductions. IRA contributions, gambling losses, charitable gifts and casualty losses are also tax deductions to consider at the end of the tax year, notes Bankrate. Medical and dental expenses are also common itemized deductions.
Alter your income amount by finding out how much dividend and interest income you earn. Your itemized deductions are reduced by this non-wage income, according to TurboTax. Income from dividends and interest is not normally covered by W-4 forms with employers, so this worksheet gives you a more accurate estimate of your income tax liability.
Adjust your allowances on your W-4 worksheet and turn in a new W-4 form to your employer if you changed your allowances. Future paychecks may have a different amount of money withheld from your net income to reflect the changes, explains the Internal Revenue Service.Learn more about Taxes