Paycheck Checkup and Withholdings
Every year, the IRS advises you to perform a “paycheck checkup” to make sure you are having the right amount of tax withheld from your paycheck. There are several reasons why you should check your withholding.
One reason to check withholding is to prevent having not enough tax withheld and being surprised by an unexpected tax liability. Another reason is check withholding is to prevent having too much tax withheld that way you receive more from your paycheck but receive a smaller refund when taxes are filed. You can utilize the Tax Withholding Estimator to avoid these problems for 2020. Results generated by the calculator can then be used to complete and submit a new Form W-4 to employers.
Also, if you had a major life change, such as marriage, the birth of a child, adoption, or bought a home, it may be a good idea to adjust your withholding and submit a new Form W-4 to your employer.
Give us a call if you need help evaluating your tax withholdings.