Open up a tax withholding account on the first day of work. Every worker gets a choice on how much money gets taken out of their paycheck.

The tax payments get taken out by the boss and sent to the California Franchise Tax Board every pay period.

Steps

1. Talk to the new boss, or the same old boss, about using income tax withholding to pay taxes all year. Don't be a rebel, everyone does this. Getting smaller amounts taken out every paycheck is easier than paying the one big tax bill at the end of the year. Bosses are used to working out with their workers the numbers to file wit the FTB.

2. Decide how much earned money to take out of each paycheck. The amount taken out is a private choice. There is a lowest amount that can be taken out. The amount depends on the highest number of allowances a worker can claim and, of course, the wages amount and the payroll period.

The boss will use the FTB income tax schedules to calculate the withholding amount. A worker can review the amount before they decide how to file for an account.

Tax payments can build up to big one at tax filing time.

A worker can also choose to have more taken out than the minimum. Doing this can put enough money into the FTB account to get a refund, and avoid any payments at tax filing time. These workers claim fewer allowances. As few as none.

3. Fill out federal Form W-4. A new boss typically will have one on hand. Or, if not, this short and easy form is available online from the IRS.

4. If a different marital status or a different number of allowances is claimed for California tax than for federal tax, fill out state form DE 4. Use this form if making itemized deductions. The boss can hand over this form. If not, the FTB posts the form online.

5. To have more money taken out than in the FTB schedules, talk to the boss. A responsible worker that plans tax payments carefully can put enough into the account to cover all their taxes. Married couples that both work can end up paying a lot of money at tax time when they follow the W-4 instructions. The instructions do not cover all income situations.

The boss and worker can agree on an added amount to take out each time, or at agreed upon times. Even once in a year. The two put the agreement in writing. The additional withholding will last as long as agreed. Workers can terminate the withholding early in writing.

A simple way for a married worker to have an additional amount taken out is to claim a single status on the W-4 form.

Source:

California Employment Development Department, California Employer's Guide 2011 (January 2011).