So you’ve filed your taxes: Congratulations! But, maybe your refund wasn’t quite what you expected, or perhaps you found out you’ll need to write Uncle Sam a check. Either way, it may be time to look into just how much money is being withheld each payday from your check.
When starting a job, employers ask the new hire to fill out a Form W-4. That information goes into the payroll system and is used to determine the amounts withheld from each paycheck. Over time situations change and it’s up to us to change the information used to calculate our paychecks.
If your refund wasn’t what you expected or you had to pay taxes, you may be able to turn it around by making some adjustments to your withholding allocations.
The Form W-4 (Employee’s Withholding Allowance Certificate) includes a worksheet to help you figure out how much federal tax should be withheld from your paychecks. The information collected is specific to your personal tax situation and includes information pertaining to:
- Marital status, dependents and other allowances
You can modify your W-4 anytime your personal situation changes, and changing your W-4 will result in more or less taxes being withheld from your paycheck. Some of these life changes may include:
- Getting married or divorced
- Adding a child or other dependent to your household
- Having a child or other dependent leave your household
- Changing jobs or being unemployed for a portion of the year
If you feel that you should be getting a larger refund or need to have more money in your paycheck, you may need to adjust your allocations and submit a new From W-4 to your employer. Try modifying the number of withholding allowances on our W-4 calculator to see what works best for you.