Fatten Your Paycheck and Still Get a Tax Refund
How you fill out your W-4 determines how much is withheld from your pay for taxes. Before you adjust your W-4, consider whether you prefer to take home more money each paycheck or if you’re holding out for a bigger refund when you do your taxes. Learn how to fill out a W-4 to adjust your federal income tax withholding and which tools you can use to take control of your tax situation.
The One Big Beautiful Bill that passed includes permanently extending tax cuts from the Tax Cuts and Jobs Act, including increasing the cap on the amount of state and local or sales tax and property tax (SALT) that you can deduct, makes cuts to energy credits passed under the Inflation Reduction Act, makes changes to taxes on tips and overtime for certain workers, reforms Medicaid, increases the Debt ceiling, and reforms Pell Grants and student loans. Updates to this article are in process. Check our One Big Beautiful Bill article for more information.
Key Takeaways
- To fatten your paycheck and receive a smaller refund, submit a new Form W-4 to your employer that more accurately reflects your tax situation and decreases your federal income tax withholding.
- To receive a bigger refund, adjust line 4(c) on Form W-4, called "Extra withholding," to increase the federal tax withholding for each paycheck you receive.
- Tax withholding calculators help you get a big picture view of your refund situation by asking detailed questions.
How can you earn a higher paycheck and receive a smaller refund?
If you'd rather have a bigger paycheck and a smaller refund, you can control this. All you have to do is submit a new Form W-4 to your employer to adjust your federal income tax withholding. You should check your paystub that comes after you change your W-4 to make sure that the resulting tax withholding is what you wanted.
Do most tax filers get refunds?
Yes. If you received a tax refund on your last return, you aren't alone. In fact, according to the IRS, most taxpayers receive a refund.
This windfall at tax time can be handy. However, it can provide even more value if it's spread out throughout the year, rather than receiving it all at once. That's because you can invest the money throughout the year, or even just put it in a savings account.
Can you adjust your withholding to move your refund to your paychecks?
If getting your refund throughout the year rather than at tax time sounds appealing, you can adjust your withholding today. To do so, you'll need to fill out a new Form W-4 and submit it to your employer.
This form requires you to fill in a few sections depending on your situation. The more accurately you complete the form, the more precise your withholding should be.
How do you adjust your withholding?
Adjusting your tax withholding helps ensure the right amount of tax is taken out of your paycheck. This can help you get bigger paychecks throughout the year and less of a refund all at once. Or, you can set yourself up to get smaller paychecks throughout the year and a bigger refund when you file your taxes. Here’s what to know about adjusting your withholding:
- For those with multiple jobs or who have a spouse who works, you'll need to complete Step 2.
- Otherwise, you can use Step 3, claiming dependents, and Step 4, other adjustments, to make changes to your withholding.\
- These options allow you to reduce the tax withheld by claiming tax credits or deductions.
- You can also add other sources of income or extra withholding if you find you want more money withheld from your paycheck.
Tools, such as withholding tax calculators, can help you figure out what to fill in on the various steps of Form W-4. You'll have to answer questions about your tax situation before the calculator will tell you how to fill out your Form W-4.
TurboTax Tip:
“Getting a large refund isn’t the only reason why you might want to adjust your withholding. For instance, having to pay a large tax bill at tax time is a good reason to increase your withholding. You should also consider adjusting your withholding if you get married or divorced, have a baby, start a side gig, or experience other life-changing events that impact your finances.” – Rocky Mengle, Attorney
How can tax withholding calculators help you figure out what to fill in on Form W-4?
Tax withholding calculators, such as the one TurboTax offers, help you get a big picture view of your refund situation by asking detailed questions. You'll need to provide information like your:
- filing status
- age
- dependents
- number of jobs worked
- income from each position
- tax withheld to date or per paycheck
- tax credit information
- deduction information
- other income you may have
If you're stuck on any question, TurboTax will provide more details about what exactly you're looking for so you can input the correct information.
How do you know if making adjustments to your withholding is the right move?
Based on the results above, you can determine if making adjustments to your withholding to lower your refund and get a bigger paycheck is the right move for you.
- If you do decide to make any changes, the calculator will show you what to write on each line of Form W-4.
- You can also adjust the results to hone in on your ideal size for an estimated tax refund — by increasing or decreasing your withholding to make sure you get the right amount in your paychecks.
How can you adjust your withholdings and still get a refund?
If you normally look forward to getting a bigger refund after you file your taxes, there's a fairly simple adjustment you can make.
- First, use the withholding calculator to fill out Form W-4 so you don’t get a refund or owe any taxes.
- Next, you'll want to adjust line 4(c), called "Extra withholding," which adds additional withholding to each paycheck you receive.
How much withholding should you add?
To figure out how much you should add, first think about how much of a refund you'd like to see after doing your taxes. Once you know your desired amount:
- Divide that by the number of paychecks you get in a year.
- Take the result and add that number to what the calculator told you to put on line 4(c).
- Assuming your tax situation matches exactly with what you put in the calculator, you should get the refund you want.
For example, say you want your refund to be $240, and you get paid twice per month (24 times per year):
- Take $240 and divide it by 24.
- Take the result, $10, and add it to the amount the calculator originally told you for extra withholding, and put the new total on line 4(c).
You should take the time to work with the withholding calculator to find the balance between a big refund and a big paycheck. Likely, for your paycheck to still be bigger, your desired refund amount will need to be smaller than your usual refund, assuming nothing else has changed in your tax situation. If your desired refund is higher than your typical refund, your paycheck will likely shrink due to the extra withholding.
Keep in mind, in order to see the results you're looking for, these W-4 adjustments will need to be made before the start of the tax year. If you make adjustments in the middle of the year, your results may vary.
What should you do after you’ve filled out Form W-4?
Once you've filled out your Form W-4, submit it to the correct department at your company as soon as possible. The sooner towards the beginning of the year you turn in the form and get it processed, the more accurate the calculations the calculator provided should be for the year. The effort will be well worth it when you start seeing bigger paychecks or when you get the bigger refund you are looking for.
How can TurboTax help with completing your tax return?
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