The Importance of Checking your Federal Withholding

Date: July 25, 2022

Most taxpayers pay their federal income tax throughout the year as their income is earned. For
many, this is done by having their taxes withheld from their paychecks by their employer, which
is accomplished by completing a form W-4 at the start of employment. However, many do not
realize that these withholdings may need to be adjusted over time.
There are multiple reasons why a taxpayer may need to adjust their withholdings. These
include major life changes such as marriage, divorce, or having children, in addition to changes
in income or employment. A taxpayer’s withholdings may also need adjustments with changes
in the tax law or other shifts in tax deductions and credits.
To ensure enough tax is being withheld, you should do a yearly check-up to determine if an
adjustment is needed. The IRS offers a free Tax Withholding Estimator to aid taxpayers in
calculating how much of their paycheck should be withheld. For more complex tax situations,
IRS Publication 505 offers further information. If a change does need to be made to your
withholdings, you will need to complete another form W-4.
If you are experiencing issues with your withholdings and wish to seek legal assistance, you can
reach out to the Low Income Taxpayer Clinic by calling (812)-339-7668.

Megan Burtis,
Low Income Taxpayer Clinic Law Clerk