File Married Filing Separately.

Then you aren't eligible for premium tax credit, but the repayment limitation seen in Table 5 of the Form 8962 instructions applies because your income would be under 400% FPL for a 1-person tax household. Repayment for someone with 35K income (271% FPL) would be limited to $1650.

No; putting 5200 will withhold 200 more each paycheck than the NORMAL withholding on a paycheck. Not a total of 200 per paycheck.

So you may need to see by how much you overpaid this year, and use that figure.

The W-4 subtitle makes it seem like that line is just for people who have dependents (child tax credit), but the instructions say you can use it for other purposes, such as your idea of getting your withholding to be more accurate.

Step 3 is where you put a dollar amount for the amount less tax you want taken across a full year.

>a taxable account ... with having the added benefit of being able withdraw money from my taxable account much earlier?

I think you probably know this, but you can withdraw your contributions from your Roth IRA without any penalty any time. It's just the earnings that have restrictions on when they can be taken out without penalty.

It bothers me that the two biggest gray areas "swell" in the middle rather than being constant height to match the vertical bars. Maybe using constant height creates other visual problems, so your thickness is perpendicular to the path of each swoosh?

Sounds like they're calculating the withholding using the method (b) that is described in Publication 15 on withholding supplemental wages. I guess they can do that with separate checks as long as it's "paid concurrently."

>...Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Subtract the tax already withheld or to be withheld from the regular wages. Withhold the remaining tax from the supplemental wages.

https://www.irs.gov/pub/irs-pdf/p15.pdf (page 19)

If you don't like the idea of overpaying so much during the year and waiting for refund, consider making an adjustment to W-4 that counters this across the year. It would be a Step 3 adjustment.

I think there are two ways for computing taxes on bonuses.

If the bonus was {treated as if} tacked onto a regular paycheck, the dumb withholding algorithim annualizes that one paycheck as if it were standard pay for every paycheck in a full year. That would make it think your income for the year is huge and withholding should be very high.

If that's what happened, you get a refund when you do your taxes, because the actual tax on your overall income isn't as high as the withholding algorithm calculated.

You could adjust a new W-4 to force a little less withholding during rest of the year from each pay check. The steps to do are a little convoluted to describe, so you might let the online tool at www.irs.gov/w4app help you out. You can pretend you had two jobs this year (one from Jan-now that you no longer hold, and one from now-Dec), tell it the total income from the first job and total withholding (including your big check), and the anticipated income from the second job; it'll give you a suggestion about how to set up the new W-4. Probably will have you enter some amount on Step 3 as if you had a "tax credit."

The withholding system does annualize your income, so if it "thinks" your annual income is 29120, it'll use the Head of Household standard deduction amount to figure your taxable income. But then if you said you have two or three kids that you'll be claiming, perhaps you entered a $ amount related to tax credit for qualifying dependent children. Your tax is less than the sum of those tax credits, so your actual tax liability is 0, so no withholding is happening, and since the child tax credit is a refundable credit, you may actually receive money.