All taxpayers should check their withholding – also known as a Paycheck Checkup – as soon as possible, even if you did one last year. By checking your withholding, you will ensure that enough is being taken out of your paycheck or other income to cover the tax owed.
Of course, Hawkinson, Muchnick & Associates is always here do a Paycheck Checkup for you. However, if you wish to do this yourself, here are some things you should know about withholding and why checking your Paycheck Checkup is important:
- You should check your withholding as early in the year as possible. If you have not yet done a Paycheck Checkup, there is still time to get your withholding on track. And, you should do a checkup ASAP.
- You should also check your withholding when life changes occur. These changes include things like:
- Marriage or divorce
- Birth or adoption of a child
- Purchase of a home
- Retirement
- Chapter 11 bankruptcy
- New job or loss of job
- Some taxable income is not subject to withholding. People with this income who also have income from a job may want to adjust the amount of tax your employer withholds you’re your paycheck. This includes income from things like:
- Interest
- Dividends
- Capital gains
- Self-employment and gig economy income
- IRA distributions, including certain Roth IRAs
- Some life changes might affect a taxpayer’s itemized deductions or tax credits. The taxpayer should check their withholding if they experience changes to their:
- Medical expenses
- Taxes
- Interest expense
- Gifts to charity
- Dependent care expenses
- Education credit
- Child tax credit
- Earned income tax credit
The best way for you to check your withholding is to use the Withholding Calculator on IRS.gov:
More information:
Pay as You Go, So You Won’t Owe
Form W-4S, Request for Federal Income Tax Withholding from Sick Pay
Form W-4V, Voluntary Withholding Request
Share this tip on social media — #IRSTaxTip: All taxpayers should check their withholding ASAP.
