Tax Tip

By
Mortgage and Lending with LendSmart Mortgage NMLS 209673 / 210042

Tax Tip

 Adjust Your Withholding

When it comes to payroll withholding, you want to get it "just right."

If you over withhold federal taxes, you'll get a big refund. That's nice once a year, but you've sacrificed control of your dollars for the other 364 days. Why give Uncle Sam a free loan of your money all year?

If you underwithhold, you'll end up owing the IRS at filing time. Owing a little isn't too bad, but a big tax bill could be hard to pay. This could cause you to face penalties as well.

It's easy to change your withholding. Just give your payroll office a new W-4. And to make sure that form will get your withholding as close as possible to your eventual tax liability, you can use the IRS' interactive allowances calculator.

Posted by

 Ed & Barbara Heiser /  The Heiser Team      Licensed Mortgage Professional

  

Ed & Barbara Heiser   SFR
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Comments (2)

Vickie McCartney
Maverick Realty - Owensboro, KY
Broker, Real Estate Agent Owensboro KY

Hi Ed and Barbara~  Being an independent contractor, it is hard to predict what I will make each year.  I am glad I haven't owed anything lately!  I guess I have been gaging it better and paying enough each quarter!

Jan 30, 2011 02:16 PM
Margo Currie
Exit 1 Stop Realty - Saint Augustine Beach, FL

Rather than over witholding to get a refund, take the extra withholding and put it in a bank. It'll earn a little interest, and it's available if you need it.

Jan 30, 2011 02:32 PM