Does my Employer Adjust my Withholdings at Work?

New Job - my Employer Adjust my Withholdings at Work?When you get a new job, the first thing they ask you to complete is a W-4 form. This form prompts you to fill in the number of dependents you have and tells your employer the amount of taxes they should deduct from each paycheck.

For many employees, this form is filled out at the beginning of their employment and never looked at again. For those that have no dependents, no changes in their life situation, and only have one job, that’s okay. But for those who may make money on the side, who have changed jobs, gotten married or divorced or even had a baby, the W-4 form should be revisited and updated.

Even if your number of dependents or marital status hasn’t changed, you should still take a look at your W-4 to ensure you are withholding the right amount of funds. Your employer will not do this for you and not updating your form could cause you to owe the IRS too much, or to get too much taken out.

We all love getting tax refunds, but sometimes a large tax refund could simply mean that you are withholding too much from your paychecks. If you thrive on your refund, then it’s okay to keep as-is, but it may be smarter for you to update your W-4 and get more money in each paycheck. You could use that money to invest, pay off credit, and make more beneficial payments throughout the year.

If you find yourself owing the IRS each year, you are probably not withholding enough. By doing this, you run the risk of receiving a large tax payment you can’t afford, causing you to fall into trouble with the IRS, which can effect your credit and your finances greatly. To avoid withholding too much or too little from your paychecks, be sure to update your W-4 form as often as necessary. A few things that will cause you to update your W-4 are:

  • You get married: a marriage usually results in two individuals joint filing their taxes. A joint file provides the couple with lower tax rates and deductions they wouldn’t have received when single. If you get divorced, the opposite will happen. Either way, you must update this on your W-4.
  •  You get a second job: Whether this job is a freelancing gig that you do from time to time or an additional full- or part- time job that you do every day, you must adjust that on your W-4 form.
  • You have a baby: having a baby or adding a child to your family means that you now have an additional dependent and a major tax change.
  • Other changes include losing a job, changing jobs, or your spouse getting a job.

If any of these changes applied to you in the last year, you will need to update your W-4 form. You can either ask your company for a form to fill out and hand back into HR or the appropriate person, or you can update your form online. If you are having trouble filling out the form or are unsure of how the changes will affect you, contact a tax professional like Levy Tax & Associates. You can reach them at 1-800-TAX-LEVY or on their website.

Contact Levy & Associates for Dependable Tax Audit Services

Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.

There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.

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