• Chris Stein, CFP®

How Do I Increase My Federal Tax Withholding Amount?

A reader would like to increase the amount of federal taxes withheld from her Social Security benefit payments.

“How do I increase my federal tax withholding amount?”

That is something you can do and quite easily, actually. When you first apply for your Social Security benefit payment, you can ask them to withhold federal taxes for you.

If you’re already receiving benefits, you’ll have to ask Social Security to start withholding taxes. To do that, you need IRS Form W-4V, “Voluntary Withholding Request.” (The V in the form name stands for voluntary.) Everyone is familiar with their W-4. It’s how you tell your employer your status so they can withhold the correct amount from your earnings. People may not realize it, but you can also have taxes withheld from your Social Security payments.

So, you tell the Social Security office how much you want to withhold voluntarily. (There’s mandatory withholding, and then there’s voluntary withholding.)

You can download Form W-4V right from the IRS website. Even the Social Security website has this if you search for it. It’s pretty easy to find. And when you complete the form, you’ll have to pick the percentage of your monthly benefit amount that you want them to withhold for taxes.

This is a little strange. With a regular W-4, you can tell your employer to hold a specific dollar amount extra, above the mandatory withholdings, which gives you pretty much total control over it.

With the W-4V, you only have four choices. You can choose for them to withhold 7%, 10%, 12%, or 22% from each benefit payment. You can’t just specify a dollar amount or a random percentage. You have to pick one of the four. Apparently, their computer can’t handle anything more than just four choices.

While you’re filling out the form, the “claim or identification number” they’ll ask you for will be the Social Security number under which a claim is filed, or benefits are paid. You might be a wage earner, a spouse, or a widow/widower, for example, and that will determine the Social Security number you use. (It may or may not be your own number.) If you’re unsure of what number to use, contact the Social Security Administration office at 1-800-772-1213 (toll-free).

Once the withholding starts, it will stay in effect until either you stop it or the payments stop. If you want to stop the withholding or change the amount, you simply fill out another Form W-4V.

Here’s the process: you fill out Form W-4V completely. Be sure to sign the form. And once you’ve done that, you can either drop it off at your local Social Security Administration office, or you can mail it in. Once they have it, they will start withholding from your benefits.

So, all you need is Form W-4V to change the withholding on your Social Security benefits.

116 views

Jim's best friend Mosby

Mnt%20Mo_edited.png
cfplogo.png
EliteLogo2011.jpg
FPA_ProudMember.jpg
SIGN UP FOR OUR NEWSLETTER!
  • Facebook
  • Twitter

Check out the background of firms and investment professionals on FINRA’s BrokerCheck.

Jim Saulnier and Associates | 970-530-0556 | 506 East Mulberry Street, Fort Collins, Colorado 80524
© 2020 Jim Saulnier, LLC. All rights reserved.

Ed Slott Advisor recognition requires an advisor to be well versed on the rules and regulations regarding IRAs.
The advisor must attend two live training sessions and pass two written exams annually to remain in the program.

Jim Saulnier, Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC to residents of: CO, IA, IN, MA, NY, TN, TX, WI and WY. No offers may be made to or accepted from any resident outside the specific states mentioned. Jim Saulnier, Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Financial Planning services offered through Jim Saulnier and Associates, LLC., a Registered Investment Advisor. Cambridge and Jim Saulnier & Associates, LLC are not affiliated.