Time To Adjust Your Tax Withholdings?

When should you adjust your tax withholdings?

This is actually a great question you should visit at least once or twice a year. Especially if you are starting a new job, or if you have any changes in your life.

Your employer will ask you to fill out a W4 form. The information you put on the W4 will tell your employer how much they should take out of each paycheck for taxes.

You will want to be sure that the IRS doesn’t take out too much, since it’s like giving the IRS an interest free loan. And you don’t want too little taken out, or you will owe at tax time on April 15th.

The tricky part is determining how many allowances to claim. You get an allowance for you, your spouse and each child. Generally, the more your have, the less taxes are taken out of each paycheck.

To help you make the best determination, I suggest you use the IRS Withholding Calculator. You can find it by going to IRS.gov and typing in “withholding calculator” in the search bar.

The great thing is that you can change your withholdings at anytime. All you need to do is fill out a new W4 form which can be found at IRS.gov/w4. Fill it out and give it to your employer.

Related posts:

Sharing The Gift of Financial Literacy
Costs Add Up When Getting A Pet
7 Money-Saving Summer Travel Tips

Please share your comments and questions