Every year, the IRS suggests doing what it calls a “Paycheck Checkup.” Check your withholding status if you:
- Get married or divorced
- Give birth to or adopt a child
- Buy a house
- File for bankruptcy
- Get a new job or lose a job
The IRS also suggests checking on any streams of taxable income that are not subject to withholding, such as interest, dividends, capital gains, self-employment income, or retirement plan distributions. You also should check your withholding if you’ve experienced changes to your medical expenses, taxes, charitable gifts, education credits, dependent care expenses, and more. These life changes might affect your deductions or tax credits. Paycheck Checkups may help you better manage the process of filing taxes.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
- IRS.gov, January 22, 2021