ROCHESTER, N.Y. (WROC) — Now is a great time to check your paycheck tax withholding to make sure you’re on target for your goals.
CPA Ryan Lane discussed how to stay on track Thursday during News 8 at Sunrise. Lane said one of the best ways to see if you’re withholding too much or too little is to see what you were refunded last year. Another option is to work with a CPA who can assess your income and withholding. “Working with a CPA is particularly beneficial if you are a self-employed individual, have independent contractor income, or if you have a side job or a second job in addition to your normal day job.”
Lane said you can modify your withholding by working directly with your employer’s HR department and payroll provider. They can help you to either adjust the withholding numbers you use or they can help to adjust your withholding by a specific dollar threshold. For self-employed or independent contract workers, it’s best to work with a CPA who can help you determine the appropriate estimated payments to make.
Note: During our conversation Lane inadvertently misspoke. He meant to say W-4 form for your withholding, not a W-9 form.
“It’s a great time to make an adjustment,” noted Lane. “With it being halfway through the year, you still have time to shore up any shortfalls you may be projected to have. Come December and January, you could face a large tax bill without many ways of making a payment other than in a lump sum. Making changes now will allow you to pay into any deficit you are projected to make over the next six to nine months. In addition, if you are projected to receive a refund, you could change your withholding to start receiving that money now and over the next six months, instead of waiting until April.”
Lane said you should speak with a CPA, your HR department, and payroll provider. A CPA can help you determine if you have too much withholding or too little. Your HR department will have great insight into how to make changes, when to make changes, and knowledge on all your other benefits. Your company’s payroll provider will be able to help you implement these changes when you’re ready to make a change.