Just because a taxpayer has already filed their tax return, it doesn’t mean that they don’t need to think about their taxes for the rest of the year. The decisions you make now can affect the outcome of your future taxes, meaning you could potentially owe a tax balance or receive a smaller refund because you may not have been withholding the proper amount throughout the year.
Because federal taxes operate on a pay-as-you-go basis, it’s highly recommended that taxpayers pay their taxes throughout the year in order to avoid any penalties they may face during tax filing season. Optima Tax Relief reviews why taxpayers should double-check that they have withheld the correct amount of tax from their paychecks, and can use the Paycheck Checkup on the IRS website in order to avoid the following:
- Having too little withheld could lead a taxpayer to expect a smaller refund.
- Having too little withheld from a paycheck could lead to a taxpayer owing a tax liability.
- Employees who have too much tax withheld will see less money in their paychecks.
It’s recommended that taxpayers use the Tax Withholding Estimator on the IRS website to check their withholdings. All taxpayers should use this tool to do a paycheck checkup as soon as possible for every tax year in order to avoid any bad news when filing their taxes. Some taxpayers should check their withholding multiple times a year to ensure that enough taxes are being taken out during their year. This includes anyone whose personal or financial information that changed due to a life event. Some life events that can affect a taxpayer’s withholding are:
- Having a baby.
- Getting a new job.
- Getting a raise at work.
If you’re looking to change how much taxes are withheld from your paycheck, simply fill out and submit your updated Form W-4 to your employer.