Monday, July 24, 2017

Tips to Perfect Your W4

The W-4 that you fill out can seem like yet another piece of paperwork you don’t have time for. However, in truth, it is actually much more than that. This form is important for providing your employer with information it needs to calculate your withholdings. Obviously, since this form plays a vital role in the final amount of your actual pay, you want to get it right! And, fortunately, there are several tips that can help you to do just that.   

Increase Your Withholdings
There are few things worse than finding out that you owe a large chunk of money come tax time. If this keeps happening to you and you’re sure your W-4 is correct, then you should make allowances to have more withheld from your check.
An easy way to do this is to determine how much you’re typically charged for your taxes and then divide that amount by the number of pay periods you go through per year. You can then ask your employer to deduct that amount from each paycheck as withholdings, thereby keeping you from owning a large sum come tax time.

Make Changes
As your life grows and changes, so should your W-4. So many people make the mistake of not updating their W-4s after a major life event. If you go through any big change such as a divorce or marriage, a new job, a home purchase, or anything of the sort, then you need to go and update your W-4 so it reflects these changes. Otherwise, you could end up overpaying in taxes or even find yourself in trouble with the IRS.

Seek Professional Advice
One final thing to do, anytime you’re filling out or updating a W-4 is to always seek professional financial advice. Most people aren’t tax experts, and there’s no shame in that, but there is shame in trying to do it all yourself. Don’t be afraid to ask for help from those with “know how.” It can only benefit you in the long run.

As you can see, you have more control over that W-4 than you think, so wield it by following these tips!