Although the filing deadline for the 2025 tax year has already passed, now is still a good time for taxpayers to start preparing for next year. One of the simplest ways to avoid surprises at tax time is to review tax withholding now rather than waiting until the next filing season.
Taxpayers generally pay federal income taxes throughout the year as income is earned. For employees, this happens through withholding, which is the portion of each paycheck an employer sets aside for federal income tax.
For self-employed individuals and others without traditional wage withholding, this often means setting aside money for estimated tax payments.
If withholding is too low, a taxpayer could end up owing money and potentially face penalties when filing a return. If withholding is too high, the taxpayer may receive a larger refund, but that also means less take-home pay during the year.
The IRS offers a free online Tax Withholding Estimator to help workers and retirees determine whether the right amount of federal income tax is being withheld from paychecks now for the taxes they may owe next year.
Using this tool can be especially helpful after completing a recent tax return, since it gives taxpayers a chance to reassess their current situation and make adjustments before the next filing season arrives.
Checking withholding is often a smart move after a major life or financial change. Buying a home, changing jobs, getting married, having a child, or taking on additional work can all affect a taxpayer’s overall tax picture.
The IRS says taxpayers should consider all sources of income when reviewing withholding, including:
Adjusting withholding can help taxpayers:
To get the most accurate results from the IRS Tax Withholding Estimator, taxpayers should gather a few key documents before getting started. These may include:
Having this information available can make it easier to estimate withholding accurately and decide whether changes are needed.
Tax planning does not need to wait until the next filing deadline is around the corner. Reviewing withholding now can help taxpayers make informed adjustments, improve cash flow, and reduce the likelihood of surprises next year.
If you are unsure whether your withholding is still appropriate based on your current income or life changes, Porte Brown’s tax professionals can help you evaluate your situation and plan ahead with greater confidence.
Source: IRS Tax Tip 2026-36
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