Re-Evaluate Your W-4 Withholding

If your predominant source of income is through W-2 wages OR you have multiple sources of income including W-2 wages and you find you’re still owing quite a bit of taxes for the prior tax year at tax time, it may be prudent to re-evaluate your tax withholding on your Form W-4.

While it’s certainly possible your prior tax year’s tax liability may be an aberration, it’s not a bad idea to look over your Form W-4 to determine if your current tax withholding properly aligns with your annual projected income and tax situation. If not, complete and file a new Form W-4 with your employer.

If you haven’t seen or updated a Form W-4 in a few years, the form may look a bit different as it’s gone through some revisions. Speak with the appropriate contact that handles Form W-4 within your business or organization for help completing the form. The appropriate person may vary depending on your business or organization but is usually associated with HR, Finance, or payroll administration.

It’s ideal to make any changes to tax withholding as soon as reasonably practicable to maximize the effectiveness.

Consult with a CPA or tax professional for appropriate guidance with your tax situation.