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!
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