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Prapass Pulsub | Moment | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
If you have a tax bill<\/a> or bigger than expected refund<\/a> this season, it may be time to update your paycheck withholding<\/a>, which can be tricky, experts say.\u00a0\u00a0<\/p>\n Typically, there’s a refund when you overpay taxes throughout the year, and a tax bill when you don’t pay enough. It’s up to the employee to tell employers how much federal tax to withhold from each paycheck via Form W-4<\/a>.\u00a0<\/p>\n The form “seems like a calculus problem,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. But there’s a “quick and dirty” way to figure it out, he said.<\/p>\n More from Personal Finance:<\/strong> After filing your 2024 return, you can see your “total tax” on line 24 on the second page of your filing, Form 1040<\/a>, Lucas said. If your earnings and tax situation are the same for 2025, your tax liability should be similar.<\/p>\n Next, you’ll need to know how much you’re withholding from each paycheck and how many pay periods remain for 2025 to see if you’re on track, he explained.<\/p>\n For example, let’s say your “total tax” was $10,000 for 2024. If there are 23 pay periods left in 2025, you’ll need to withhold roughly $435 from each paycheck, Lucas said.<\/p>\n To withhold more, you can resubmit Form W-4 with an “extra withholding” added in the “other adjustments” section of step 4, he said.<\/p>\n “That’s the simple, back-of-the-napkin method,” Lucas said.<\/p>\n However, you’ll need to readjust your W-4 at the beginning of the next tax year. It should also be updated as your tax situation changes \u2014 like a bonus, second job, marriage, divorce, having a child and more.<\/p>\n<\/div>\n If your tax situation has changed or you want a more detailed update, you can use a free IRS tool<\/a> known as the “tax withholding estimator,” Lucas said.<\/p>\n “It’s intuitive and it actually does a really good job,” he said.<\/p>\n You’ll also need pay stubs from all jobs (including your spouse) and most recent tax returns. But it won’t be a good fit “if your tax situation is complex,” according to the IRS.<\/p>\n With rapid changes in income, investment earnings or retirement plan distributions, you may need quarterly estimated tax payments<\/a> to avoid IRS penalties, said Sheneya Wilson, a certified public accountant and founder of Fola Financial in New York.\u00a0<\/p>\n<\/div>\n
You could see tax Form 1099-K for the first time this season<\/a>
Credit card debt hits record $1.21 trillion, Fed research shows<\/a>
Americans to spend a record $14.6 billion on Valentine’s Day<\/a><\/p>\n<\/div>\n‘Back-of-the-napkin’ math for your withholding<\/h2>\n
Use the IRS ‘tax withholding estimator’<\/h2>\n