(Daniel Brosam / U.S. Air Force/MGN)

It might be time to adjust your W-4 tax withholding

If you are disappointed by this year’s tax refund — or even worse, if you find that you owe money — you can avoid a similar fate next year by adjusting your withholding now.

Having more money taken out of your paycheck for taxes throughout the year will mean you are less likely to owe money to Uncle Sam at tax time, and more likely to get a refund.

Of course, getting a refund is not necessarily a good thing. As we have pointed out several times before in stories like “8 Foolish and Costly Financial Fouls — and How to Avoid Them,” receiving a refund is like having given an interest-free loan to the government.

That is another reason why adjusting your withholding now is smart.

The IRS recently released a new Tax Withholding Estimator — and is urging everyone to use it to determine whether they should adjust their withholding.

If you use the new estimator and decide to adjust your withholding, the estimator will even help you fill out a new Form W-4 to give your employer.

Author: Money Talks News
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