Income Tax Withholdings From Payroll

As an owner/employee of your company, it is ultimately your choice in how you want to approach income tax withholdings settings. The information below is just an optional strategy you can follow. If you have employees other than yourself, then the information below does not apply to them (they would need to select their filing status and withholdings based on Form W4).

Tip: tax withholdings do not actually change how much or how little tax you ultimately owe for the year!

Tip: the filing status you use for withholdings does not have to be the same as the actual filing status used when your individual tax return is filed. When it comes time to file your individual tax return, rest assured it will reflect your correct filing status.

Recommended Settings (Federal):

Recommended Settings (State - New York):

The recommended settings above will result in maximum withholdings. As the owner of your own company, this approach makes sense because your overall income is largely influenced by the net income of your company, not just the paycheck you receive from the company. Your exact tax liability for the year is not known until your individual tax return is prepared.

It's ultimately your choice in how you want to approach withholdings settings! The information above is just an optional strategy you can follow.

Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.