Employees Should Take Time to Check Withholding

The Internal Revenue Service reminds taxpayers to check their withholding in their Tax Preparedness Series.

Besides wages, income tax is often withheld from other types of income, such as pensions, bonuses, and commissions. Ideally, taxpayers should try to match their withholding with their actual tax liability. If not enough tax is withheld, they will owe tax at the end of the year. If too much tax is withheld, they will lose the use of that money until they get their refund. You should check your withholding whenever there is a major financial change such as getting married/divorced, buying a house, starting a new job, or if you have a big refund or unexpected balance due on your personal income taxes. You can check your federal income tax using the IRS Withholding Calculator.

If you discover that you need change the amount being withheld from you paychecks, you will need to give your employer a completed Form W-4, Employee’s Withholding Allowance Certificate.