Hey @Zeni Kharel - A good time is whenever there's a meaningful change in your financial situation. For example, (1) You get a new job or start generating side income; (2) You experience a life event like a marriage, divorce, or have kids; (3) You become eligible for big deductions or credits like those related to buying a home, investing in real estate, etc.; and (4) There's a change in tax laws that might impact your bracket or deduction.

Regardless, it's still good to review your withholdings at least once a year...usually after filing your tax return.

Withholding with your employer only knows about the income that you earned with them. They don't know your tax situation which includes interest, dividends, credits or deductions you are eligible for.

If you find it that there is a big situation that will change your taxes, it may be a good time to update your W-4 form.

However, I personally would only do it if I think the taxes/withholdig will change by more than a few thousand.

At a minimum, review after your tax filing. You can then determine whether you overwithheld or underwithheld and adjust according to your preference. In practice I generally see overwitholding so there are no surprises for a large tax due at filing. 

Great question — adjusting your tax withholdings can be a smart move at any point in the year, depending on your financial goals and changes in your income.

The IRS actually has a Tax Withholding Estimator that’s really useful:

https://www.irs.gov/individuals/tax-withholding-estimator 

It takes into account your income, dependents, deductions, and other variables to help you dial in the right amount of withholding — whether you want to avoid a surprise tax bill or maximize your take-home pay throughout the year.

Personally, I like to review my withholdings early in the year (January or February) after I’ve filed my taxes for the prior year. That way, I have a clear picture of whether I overpaid or underpaid, and I can make informed adjustments to my W-4 for the new year. But really, any time your situation changes — like a raise, new side hustle, real estate income, or even getting married — it’s worth revisiting your withholdings.

Staying proactive with this is one of the simplest ways to stay ahead financially.

Your employer only withholds based on the income you earn from them—they don’t account for your full tax picture, which may include interest, dividends, deductions, and credits. If you expect a major change in your tax situation, that’s usually a good time to update your W-4. Personally, I’d only adjust if the difference in withholding or tax owed is going to be more than a few thousand dollars.