Every year, the IRS recommends doing what they call a “Paycheck Checkup.” This includes checking your withholding status to make sure enough taxes are being taken out of your paycheck. You should do a Paycheck Checkup in the beginning of the year, but it can be done in any season.
Check your withholding status if you have:
• Gotten married or divorced
• Had or adopted a child
• Bought a house
• Filed for bankruptcy
• Got a new job or lost a job
The IRS also recommends checking on any streams of taxable income that are not subject to withholding, such as interest, dividends, capital gains, self-employment income, or IRA distributions. You should also 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. These Paycheck Checkups will help make sure you’re in a good place when it’s time to file 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.gov