The start of the new year is the perfect time to review your tax withholding and make changes if necessary.
LOOK AT THE PAST
Start by looking at your 2021 tax return. Did you receive a large refund, or did you have to write a hefty check? In either case, it may indicate your paycheck withholding is out of sync with your tax reality.
LOOK TO THE FUTURE
Looking to 2023, do you expect to have any life changes? For example, do you plan to get married or have a child? Are you planning to start a side business? Will you need to begin caring for aging parents? Life changes can impact your 2023 tax liability.
MAKE CHANGES
The IRS offers a Tax Withholding Estimator that may help you determine if you need to withhold more or less from each paycheck: https://www.irs.gov/individuals/tax-withholding-estimator. If you believe you need to make changes to your tax withholding, speak with your tax professional to understand what you should change. You can request a blank Form W-4 from your payroll department or the IRS.gov website.