It’s important to know what your tax holding should be and that it will be sufficient to cover the taxes that you owe.
Sometimes it may be necessary to change your social security tax withholding, but you may be unclear how to go about doing this.
We will look at whether you are able to make this change online or if it needs to be done another way such as filling in a form or contacting the IRS.
What Is Tax Withholding?
Tax withholding is the amount of money withheld from income to cover the payment of taxes.
For employees their employer withholds a certain percentage of their paycheck to pay for income tax and other taxes such as social security and medicare taxes.
The amount of tax that is withheld from your paycheck will depend on two main factors, how much you earn and the information that your employer holds about your circumstances.
The tax is then paid to the Inland Revenue Service in your name by your employer.
If you don’t pay your taxes from withholding then you will have to pay what is known as estimated tax. This is typically the way that self employed people pay their taxes.
It is a good idea to check your tax withholding status to ensure that you are paying enough to cover the taxes that you will owe.
You should check your tax withholding early in the year, when there is a change in tax laws and there are any changes to your life circumstances.
Tax withholding is also applicable to pensions, bonuses, gambling winnings and commissions.
US source income received by a foreign national is subject to tax at 30% and in this instance the tax withholding is known as the Non-Resident Alien withholding.
When Is Tax Withholding Necessary?
Tax withholding is used to pay for any taxes that you may be required to pay. Employers are required by law to deduct a certain amount from employees paychecks to cover taxes that are due.
This is normally income tax, social security contributions and medicare taxes.
For those who receive social security your income will only be taxable if it is above $25,000 for a single person or over $32,000 for a married couple.
Amounts below these levels are not taxable. If you report income amounts above these levels you will be liable for tax on 85% of your benefits.
If you are in receipt of social security benefits then you can ask the Social Security Administration to withhold some of your money when you first apply.
For those who are already getting social security benefits you can request to have tax withholding, or you can change the amount or stop the withholding altogether.
Tax withholding on social security is completely voluntary and is in no way compulsory.
When you request tax withholding on your benefit you will need to specify what percentage you wish to have withheld.
The choices are 7%, 10%, 12% or 22% of your monthly benefit. Only these amounts can be withheld and there is no facility for having flat dollar amounts withheld for tax purposes.
There are tax withholding calculators available so that you can accurately assess how much of your social security benefits you need to have withheld.
Can You Change Social Security Tax Withholding Online?
The Social Security Administration’s website is designed to make the use of their services quick and convenient. If you haven’t already done so, you can open an online account.
This personalized account is called my Social Security and you can use this to inform the SSA about changes to your circumstances.
You can apply for benefits online, check the status of an appeal or application or request a new social security card if you lose yours.
However if you need to change your social security tax withholding you will need to download a form online, fill it in and post it back to the Inland Revenue Service.
Alternatively you can deliver the form in person to your local social security office.
The necessary paperwork is Form W-4V from the Internal Revenue Service (IRS) and can be downloaded from their website.
You will need to fill in your details such as name and address, any identification number and the percentage of withholding that you want.
You can request a 10% withholding tax from your unemployment contributions or 7%, 10%, 12% or 22% on other benefits.
There is also the option on the form to request that your tax withholding be stopped altogether.
So although you can’t change your withholding online at present you can download the form from the IRS site and fill it in.
What Are The Ways You Can Change Your Social Security Tax Withholding?
As well as downloading Form W-4V from the website of the Inland Revenue Service to request a change to your social security tax withholding you can also call the toll free number 1-800-829-3676 and ask for Form W-4V, Voluntary Withholding Request.
You can then fill in the form with the required changes and return it to your local social security office by post or in person.
If you feel that your current percentage of tax withholding is not enough then you can request that it be increased.
By ensuring that your social security tax withholding is sufficient to cover any tax that you are liable for you will avoid any underpayment penalties from the Inland Revenue Services.
Alternatively if you are no longer liable for taxes for example if your income falls below the taxable threshold you can request that your social security tax withholding be stopped completely.
You can change your social security tax withholding by downloading the form from the Inland Revenue Service’s website and filling it in to reflect the required amendments.
The form should then be mailed to your local social security office or take it there in person.
We hope this guide has helped you with changing your social security tax holding.