Can a Person Select Single for Withholding Purposes Even Though They Are Married?
When you accept a job, your employer will ask you to complete a Form W-4, Employee's Withholding Allowance Certificate, which tells your employer how much tax to withhold from each paycheck. You want to have enough tax withheld so that you don't end up owing a lot of tax at the end of the year and to avoid incurring a tax penalty for not paying enough tax. Single people have taxes withheld at a higher rate than married people. In some instances, you may find choosing a withholding status of single beneficial even though you are married.
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Withholding Status
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Form W-4 gives you three options for withholding status. Single people, and married people whose spouse is a nonresident alien, or who themselves are nonresident aliens, must report their withholding status as single. If you're married, you may choose a withholding status of married, or you may check the box marked "Married, But Withhold at Higher Single Rate," which insures that more taxes will be withheld from your paycheck.
When to Withhold as Single
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If you have income from self employment, as well as income from your job, you'll owe taxes on your self-employed income. You can pay these taxes by making quarterly tax payments, but if the amount of your self-employed income is small, you may cover the amount due by asking your employer to withhold taxes at the higher single rate. If your spouse has self- employment income, you may can cover her taxes, or part of her taxes, by withholding at the higher single rate. If you and your spouse both work for others, you may find you still owe taxes at the end of the year. If one or both of you ask to have taxes withheld at the higher single rate, this could eliminate your tax debt at the end of the year.
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Changing Status
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The Internal Revenue Service (IRS) allows you to change your withholding status at any time. Fill out a new W-4, and give it to your employer. You can begin the year with a withholding status of Married and change to withholding at the higher single rate if you anticipate owing more income tax due to changes in your financial circumstances during the year. You can also add or subtract withholding exemptions.
Considerations
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Your employer uses your W-4 as a reference but doesn't forward the form to the IRS. Instead, the IRS monitors withholding to determine if you're paying enough taxes. The IRS is more concerned that you pay enough taxes during the year. Withholding at a higher rate is unlikely to raise any red flags for the tax office. Unless notified to do otherwise by the IRS, your employer must abide by your wishes regarding withholding. If you fail to submit a W-4 at all, your employer will withhold taxes as if you were single with no exemptions.
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