Have You Checked Your W4 Tax Withholding Yet?

W4-Form-lg

Taxpayers who haven’t yet checked their withholding should do so now. The IRS recommends that you perform a Paycheck Checkup at least once per year.

The advantage of checking your w4 withholding is to make sure enough money is coming out of your paycheck to cover the amount of tax you owe. You can also ensure that you’re not taking too much out of your paycheck.

Why You Should Perform a Withholding Check

The IRS says that it’s best to calculate your withholdings early in the year. This is to ensure that you get your withholding in as soon as you possibly can.

Circumstances that Warrant a Withholding Check

Major life changes should always warrant a withholding check.

For example, if you got married or divorced, welcomed a new child into the family, bought a home, retired, got a new job, or you entered Chapter 11 bankruptcy you should perform a withholding check.

What Isn’t Subject to Withholding?

Take note that some types of tax withholdings aren’t eligible for withholding. This type of income means you may need to change the amounts withheld from your paycheck.

Types of taxable income not eligible for withholding include capital gains, dividends, interest, self-employment income, and distributions to IRAs.

Watch out for Changes to Itemized Deductions

Any changes in your life that may impact tax credits and itemized deductions should also warrant a withholding check.

For example, if you’re experiencing changes to medical expenses, your personal income tax bracket, any charitable gifts, expenses on dependent care, education credits, earned income tax credits, and child tax credits it’s time to make sure your employer is withholding the correct amount.

If you need to perform a withholding check, you should calculate your withholdings

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