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How Much Withholding You Should Claim and How to Change It

Tax Withholding

Author: Tammy Doss

Here we are mid-year 2023. A great time to reflect on the first six months of the year and then jump into action. Yep, income taxes come around every year!

This is an opportunity to look at where you will stand at the end of the year. It may be time to contact your tax professional and get some advice or do a little calculating yourself.

REMINDER: If there are too many taxes deducted from your paycheck by the IRS or the State of California, they are holding your tax money and earning interest on the money before returning the money to you when you file your tax return and receive a refund. The government entities are getting the benefit of the interest you could have been receiving if you put your own money to good use in a savings account. You should manage your own money!

Are you deducting enough taxes from your paycheck or too much?

Are you putting anything into savings?

Are you considering a holiday savings account?

Changing Your W4

You can change your W-4 – (IRS withholding document) and/or your DE4 (State of California withholding document) at any time. Just complete the form and submit it to a Job Shop representative and your changes will be made on the next payroll. A few other things to consider:

  • Were you married or divorced this year?

  • Did you deliver or adopt a child?

  • Are you a caretaker for an adult family member now?

  • Did you start a 529 Plan for your child/children?

The above items will affect your withholding options and although these may seem very basic the list goes on and on and is the reason for consulting an expert in tax preparation.

If you feel like you are withholding too much or too little, then make the change now so you are set at year end to file your taxes and not owe money you don’t have set aside!

Have you started a savings account for emergencies or special occasions? The Job Shop offers direct deposit of your paycheck. You can allocate part of your net check to your checking account and part to a savings account. The smallest amount to savings will add up quickly and may come in handy for emergency auto repairs or Holiday gifting.

These small changes can make your life easier come April 15, 2024! Look ahead and understand that you are the best person to interpret your own finances.

You can request new tax forms at any time and once you are confident that your changes (or no changes) are complete it is time to enjoy the opportunities that the Job Shop can offer to place you in the perfect job or update your current position. Please reach out to us as we are here for you.

Wishing you all a wonderful summer!

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