While it’s certainly better to overpay your taxes than underpay them, if you find that you’re consistently and significantly overpaying in taxes and your primary income comes from W-2 wages, it may be a good idea to revisit your Form W-4.

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.

As a business owner, you may consider distributing bonuses to employees as a show of appreciation for their passion and dedication to the business and/or to reward employees for exceptional performance and/or achievements. It’s important to remember that bonuses should be treated as taxable income and reported accordingly.