Why update your W4? First, what is the W - 4.
The Form W - 4, is the payroll form that tells your employer how much money to withhold from your paycheck for taxes. It is completed when you first get hired by your employer. As we work over the years, however, our lives change, families change, we get multiple jobs, but we seldomly change our W - 4. Which means, your employer is still withholding taxes, based on how your life was, when your first got hired. For some people, that is 5, 10, 15 years ago, a whole marriage ago, and children (who may now be adults).
If you are paying taxes every year or getting very large refunds, it's more than likely that your W - 4 may need to be changed. You can update this with your manager or HR department at your job. Here's why you may want to consider updating your W - 4...
Balance due last year -
Did you owe taxes last year when you filed your tax return? If so, then not enough taxes were taken out of your paychecks throughout the year to cover your taxes. This could have been a result of changes to your family situation, such a change in marital status, children getting older and not qualifying for certain child tax credits, a change in residence, multiple jobs, or a number of other things. Whenever changes happen in your life that could affect your income, you should update your W4 with your employer to ensure enough taxes are being withheld. This will help you to avoid owing taxes when you file your tax return.
Sometimes you may need to change your W4 because you received a tax refund for overpayment of taxes. Meaning you paid too much in taxes throughout the year. Adjusting your W4 will reduce the amount of taxes withheld from your paychecks each pay period and increase your take home pay for each paycheck. This will result in a smaller tax refund at the end of the year but your paychecks will be bigger throughout the year.
How we can help
If you are an existing client, you can schedule an appointment with us to review your paychecks and W4. If you are a new client, we just ask that you provide your last year tax return when you book your in person or virtual appointment.
We will evaluate the taxes being withheld from your paychecks and compare that to your last year tax return. We will also ask for updates for any life changes you have had this year or expect to have by the end of the year that could affect your tax return. Once we evaluate your situation, we will let you know if you are on track with the amount of taxes being withheld from your paychecks or if your W4 should be adjusted to ensure you don’t owe taxes when you file your return.
As a reminder, taxes withheld from your paychecks is only an estimated amount of what you should owe at the end of the year based on your income and lifestyle. Everyone’s situation is different and could change from year to year.
How to contact us
Here’s how to contact us to book your appointment:
Call us 901-425-5521
Email us at email@example.com
Book Online at dukesaccountingandtax.com or any of our social media platforms