How to Decrease Federal Withholding
- 1). Calculate your allowances. On the W-4 form, complete the "personal allowances" portion of the worksheet. This section will change if you or your spouse is no longer working, if you have added a child or other dependent to the family, or if you have increased your child care expenditure. More allowances equal a lower withholding value.
- 2). Fill out the Deductions and Adjustment worksheet if you plan to itemize your deductions on your tax return or to claim adjustments to income. You will also need to complete this worksheet if you plan to complete the Two Earners/Multiple Jobs worksheet. Add the calculated allowance to the total on Line H of the Personal Allowances worksheet. Use your recent pay stubs and prior tax return to estimate current year earnings and costs.
- 3). Complete the Two Earners/Multiple Jobs worksheet if you and your spouse work full time or if you hold multiple jobs. Note that this worksheet is likely to increase your withholding if your total income pushes you into a higher tax bracket. It may be beneficial, however, if your total income has decreased since last year.
- 4). Complete the W-4 Withholding Allowance Certificate, following the form instructions carefully.
- 5). Detach the W-4 form from the rest of the worksheets and turn it in to your payroll supervisor.
Source...