As the middle of the year has arrived, it is a good time to look at your year-to-date withholdings. Many changes happen throughout the year, and looking at your withholdings can help you from either owing a “surprise” large amount, or paying in more than necessary throughout the remainder of the year. Withholidng calculations is a service provided for our clients with no charge (once per year). The IRS also provides Withholding Calculator on their website (http://apps.irs.gov/app/withholdingcalculator/)
The following items are needed when calculating your withholdings (and Estimated Tax Payments):
- Have your last two pay stubs for every source of income
- Have your current Profit and Loss Statement (for businesses)
- If you itemize, and any deduction is anticipated to change greater than 20%, we will need revised estimated information
- Any new or changes to dependents and/or filing status
- Your Current W-4 withholdings
If a change is necessary, we will provide you with a W-4 and the recommended Personal Allowance for the remainder of the year. The IRS also provides this form on their website (http://www.irs.gov/pub/irs-pdf/fw4.pdf).