Got a large-ish raise, do I need to adjust anything?

[redheadbaker]

I never post here, because I am NOT money-savvy. 

I got a large-ish raise (double-digit percentage). Do I need to adjust anything for taxes? 

We always owe b/c of side income that doesn't have tax withheld, but I'd rather not owe more than usual come next tax season (we already filed and paid 2021 taxes). 

[egeiger]

I *think* that it depends on how your withholdings are set up. If you just filled out the W4 when you got hired for them to withhold based on # of people in the household, and status, then nothing needs done, because it would be withholding a percentage of your income. But, if you are having a flat amount additionally withheld, you would want to modify that amount. Hope that makes sense!

[Deleted]

Congrats on your raise!

I would look at increasing your retirement contribution if you aren't already maxing out.

[dr.girlfriend]

It's a pain, but I would use one of those calculators to estimate how much tax you need withheld. DH and I always did 0 even though we filed jointly with a kid, and then I typically had an additional set dollar amount withheld. Sometimes we got big refunds (e.g. when we got a big solar rebate, etc.) but we never owed big. You may be better off waiting until you get your first new paycheck, but this describes what you need before you get too deep into it.

www.irs.gov/individuals/tax-withholding-estimator

[redheadbaker]

Thanks! This was helpful.

[dragon's breath]

You may not need to adjust your own W4, but your spouse might need to (it depends on if they are on the new W4 or the old W4. New W4 tries to account for total household income and tax accordingly. If spouse has your old income on a new W4, it can make it so their paycheck isn't withholding enough.)

[ssmjlm]

After tax stuff, I would up retirement if you’re not maxing. It will also reduce your taxable income.