Have you previously considered changes to your W-4? In the event that you did, it might be time to contact your employer and review your W-4 form. Your W-4 is essential for letting your employer know how much to deduct and withhold from your pay. We want to discuss what changes you can make and how to ensure your W-4 is completed correctly.
Changing Withholding Rates
Luckily, your W-4 won’t require you to fill it out every year, unless you want to change certain information. In the event that you want to adjust withholding rates, a new document will need to be completed. This can come at a time where you’re experiencing important life changes, such as marriage, having children, and more. Annual reviews help you understand what’s being withheld by your employer each year and how to optimize rates for your current financial situation.
Fixing Mistakes
If there are mistakes with your W-4, this can create additional problems for you and the internal revenue service (IRS). Selecting the wrong filing status, not accounting for a second job or a spouse who will also be getting a W2, as well as selecting too many dependents. When tax season arrives, these errors can leave you with an underpayment to the IRS, resulting in a tax penalty, ultimately increasing the amount you owe.
On the other hand, you can also end up having more withheld resulting in a smaller paycheck. You will end up receiving a tax refund at the end of the year based on the excess amount that was withheld.
To avoid any problems, be sure to visit our contact page to get in touch with us! An accountant can review your tax documents and recommend necessary adjustments to benefit you. Similarly, we offer other tax preparation and planning services to help you out! For more information, be sure to check out our website.