Just recently moved? Just tied the knot? Landed a second job? These are some common reasons for updating your W-4 form as an employee. Each time you earn income, you’re likely to owe income taxes. Depending on your W-4 information, your employer sets aside a specific amount to pay federal taxes on your behalf. Hence, ensuring your W-4 form stays current with recent changes and corrections is vital. Here are some common reasons for updating your W-4.
Address Change
If you’ve recently changed addresses, it’s vital to inform the IRS promptly to ensure you receive any due tax refunds or correspondence. Notify your current or former employer, depending on time frame, to ensure your W-2 reaches your updated address. More details on updating your address with the IRS can be found here.
Marital Status Changed
Another important reason is if your marital status has changed due to marriage or divorce. Update your W-4 accordingly, as married individuals filing jointly qualify for a lower tax rate and other deductions compared to single filers. Divorce can also impact your tax benefits, making it essential to adjust your information with the IRS for accurate withholding.
Children or Adoption
If you’ve recently welcomed a child or adopted one, you may be eligible for the Child Tax Credit or other potential tax credits. Make sure to include these details in your W-4 calculations.
Job Updates
Getting a new job is a common reason for updating your W-4. Typically, an increase in income leads to higher tax liability. Similarly, if your spouse secures a new job or changes employment, updating this information is necessary. Moreover, if you experience unemployment during the year due to job loss, adjusting your withholding on a new W-4 is important.
These are just a few of the primary reasons why employees should update their W-4 forms. Stay ahead of the game, making sure tax season runs smoothly and efficiently. The first week of February is a great time to get this all updated! Happy taxing everyone.