If so, consider updating the amount your employer withholds for federal income tax.
The IRS is encouraging taxpayers to consider checking the amount of federal income tax that is being withheld to help avoid or reduce the amount of tax due at filing or reduce the amount over-withheld over the course of the year.
Following are some reasons to change your federal withholding:
- Change in marital status during the year.
- Change in the number of allowances you qualify for due to the birth of a child, claiming an elderly parent or losing the ability to claim a dependent
- Significant changes in non-wage income such as stock sales, dividend and interest income, flow through income from partnership or S Corps
To change the amount of federal income tax being withheld, speak with your employer. You may need to provide an updated W-4 (Employee’s Withholding Allowance Certificate).
The IRS offers a Withholding Calculator to help you determine if you need to update your withholding.
You may also consider making estimated tax payments.