Is Your Tax Withholding Correct?
There are good surprises and there are bad surprises. Generally, a tax-related surprise is probably unwanted. To avoid tax surprises, people should review their tax withholding. There’s still time left in 2022 to make changes and see the benefit on their tax return next year.
An adjustment made now will help people avoid the surprise of a balance due or a larger-than-expected refund. People who owe taxes when they file may also face a penalty for underpayment, so they should take steps to avoid that.
Since credit amounts may change each year, it’s imperative that a taxpayer make adjustments to their tax withholding when they make life changes. Events such as marriage, divorce, a new child, a new home purchase, or changes in tax laws can all be reasons to adjust withholding.
Proper withholding adjustments help people boost their take-home pay rather than over-withholding taxes throughout the year and getting it back as a tax refund.
Taxes are generally paid throughout the year, whether from salary withholding, quarterly estimated tax payments, or a combination of both. About 70% of taxpayers, however, withhold too much every year which typically results in a refund.
Please contact us if you need help adjusting your withholding.