Check Your Tax Withholding Now to Prevent a Tax-Time Surprise
Each year, many people get a larger refund than they expect. Some find they owe
a lot more tax than they thought they would. If this has happened to you,
review your situation to prevent a tax surprise. Did you marry? Have a child?
Change in income? Life events can have a major impact on your taxes. Bring the
taxes you pay closer to the amount you owe. Here are some tips to help you come
up with a plan:
When you start a new job, you must fill out a
, Employee's Withholding
Allowance Certificate, and give it to your employer. Your employer will use the
form to figure the amount of federal income tax to
from your pay. Use
the IRS Withholding Calculator on IRS.gov to help you fill out the form. This
tool is easy to use and it’s available 24/7.
If you earn income that is not subject to withholding you may need to pay
. This may include income such as self-employment, interest,
dividends or rent. If you expect to owe $1,000 or more in tax, and meet other
conditions, you may need to pay this tax. You normally pay it four times a
year. Use the worksheet in
, Estimated Tax for Individuals, to
figure the tax. Your preparer here at ElecrtroFile Income Tax Service can
assist you with this.
Check to see if you need to change your Form W-4 or change the amount of
estimated tax you pay
when certain life events take place
. A change in your
marital status, the birth of a child or the purchase of a new home can change
the amount of taxes you owe. In most cases, you can submit a new Form W–4 to
your employer anytime.
Changes in Circumstances.
If you are receiving advance payments of the
premium tax credit
, it is
important that you
report changes in circumstances
, such as changes in your
income or family size, to your Health Insurance Marketplace. You should also
notify the Marketplace when you move out of the area covered by your current
Marketplace plan. Advance payments of the premium tax credit help you pay for
the insurance you buy through the Health Insurance Marketplace. Reporting
changes will help you get the proper type and amount of financial assistance so
you can avoid getting too much or too little in advance.