- ORIGINAL NEWS
This simple calculation will show if you’re withholding enough taxes from your paycheck
- SUMMARY
If your tax refund or bill is significantly different from what you expected, it might be time to adjust your paycheck withholding.
To calculate your effective tax rate, divide your total tax by your taxable income from last year’s tax return.
Aim to withhold at about the same rate this year.
This can help you avoid unexpectedly large refunds or bills.
Remember to notify your employer of any life changes that might affect your withholdings, such as marriage, divorce, or a new job.
Regularly reviewing and adjusting your withholdings can help ensure you’re paying the right amount of taxes throughout the year.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“Typically, you get a refund when you overpay taxes throughout the year, and you owe money when you don’t pay enough.”
“Experts suggest reviewing your withholdings periodically to avoid a larger-than-expected tax bill or refund.”
Negative
“But the form is “very confusing,” according to certified financial planner and enrolled agent John Loyd, owner at The Wealth Planner in Fort Worth, Texas.”
“The problem is that form is so foreign to people,” she said. “They see it and their eyes glaze over.”