Last updated on October 28, 2019 at 12:44 pm
This is a great time of year for you to think about the accuracy of your income tax withholding.
As you know, employers withhold income tax from employees’ wages in accordance with the information that they provide when completing Form W4, Employee’s Withholding or Exemption Certificate. If the information provided is no longer accurate, the employer may be withholding too much or too little.
To avoid any inaccuracies, now is a good time to do something about it. You should think about checking your tax withholding early in the year and compare the total tax to be withheld from your pay for the year with what you expect your income tax liability to be for the year.
Of course, you should check your withholding again during the year if the tax laws change or if any of the following apply to you:
- Your filing status has changed
- You are married filing jointly and both you and your spouse work
- You have more than one job at a time
- You have nonwage income (such as interest, dividends and capital gains) that is not subject to income tax withholding
Now that you know how important it is to keep an eye on your withholding — and when it is the best time to make changes — watch for our next blog when I will talk about Form W4 and how it works.
Happy New Year!
Ken Bagner is a member of Sobel & Co. LLC. He is a member of the American Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accountants. Plymouth Rock Assurance in NJ is proud to partner with NJCPA to bring you valuable tips for about your financial health. Qualified members of the NJSCPA can receive a discount on their car insurance through Plymouth Rock Assurance New Jersey.