- You received an especially large 2017 refund,
- You've gotten married or divorced or added a dependent,
- You've bought a home,
- You've started or lost a job, or
- Your investment income has changed significantly.
Making a change
You can modify your withholding at any time during the year or even more than once within a year. To do so, submit a new signed Form W-4 to your employer. Changes should go into effect on your next paycheck (depending on pay frequency) after the new Form W-4 is submitted. For estimated tax payments, you can make adjustments each time quarterly payments are due in April, June, September, and January.
Click here for the 2018 Form W-4
While reducing withholdings or estimated tax payments will, indeed, put more money in your pocket now, you also need to be careful you don't reduce them too much. If you don't pay enough tax throughout the year on a timely basis, you could end up owing interest and penalties when you file your return, even if you pay your outstanding tax liability by the April 2019 deadline.
One timely reason to consider adjusting your withholding is the passage of the Tax Cuts and Jobs Act late last year. The IRS had to revise its withholding tables to account for the increase to the standard deduction, suspension of personal exemptions, and changes in tax rates and brackets.
If you'd like help determining what your withholding or estimated tax payments should be for the rest of the year, please contact your MarksNelson professional at 816-743-7700.