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.