Whether you’re employed or self-employed, understanding how tax withholding works can help you avoid costly mistakes and maximize your financial control. Let’s break down what it is, how it affects your paycheck, and how to make sure you’re getting it right.
Tax withholding is the amount of money automatically deducted from your paycheck to cover federal income taxes. It’s your contribution to the IRS—paid in advance, in portions, throughout the year.
Employees typically see this deduction on every pay stub. If you’re self-employed, you’re responsible for sending in these payments yourself on a quarterly basis.
Some individuals may qualify to be exempt from withholding altogether
If you received a full refund last year and expect to owe nothing this year, you might be eligible. You can claim this exemption using the W-4 form provided by your employer.
Want to keep more of your money upfront? You might be eligible for deductions such as:
These reduce your taxable income and help lower the amount withheld from your paycheck.
Married and filing jointly? Adjust your W-4 form to reflect both incomes. This helps avoid underpayment or overpayment when tax season arrives.
Each year, the IRS updates its tax withholding tables. These guidelines help employers calculate how much to deduct based on your wages, filing status, and claimed dependents
The deadline for filing federal taxes is typically April 15, with a possible extension to October 15 if you file for one. However, payments are still due in April to avoid penalties. Have questions or need more details? Call us now or send an email—we’re here to help!
