Adjusting tax withholdings

[Zeni Kharel]

Good morning,

When is a good time to adjust tax withholdings? 

Thank you.

[Tajana Reagan]

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.