MOUNTAINSIDE – With less than three months remaining in the calendar year, individual taxpayers are encouraged to double check their federal withholding now to make sure they are having enough taxes taken out of their pay.
“Now is a good time to make sure your employer is withholding the proper amount,” said Gregg Semanick, IRS New Jersey Spokesperson. “If you face a shortfall in your federal withholding, there is still time left in the year to make up the difference.”
The average refund for 2009 was $2,887, up 8 percent from 2008. Even though the Making Work Pay Tax Credit lowered tax withholding rates in 2009 and 2010 for millions of American households, some workers and retirees still need to take steps to be sure enough tax is being taken out of their checks.
Those who should pay particular attention to their withholding include:
- Married couples with two incomes
- Individuals with multiple jobs
- Some Social Security recipients who work
- Retirees who receive pension payments
Failure to adjust withholding could result in potentially smaller refunds or in limited instances may cause a taxpayer to owe tax rather than receive a refund next year. Also, a taxpayer with too little withholding may face a penalty for underpayment of tax.
The IRS Withholding Calculator on IRS.gov can help a taxpayer compute the proper tax withholding. Worksheets in Publication 919, How Do I Adjust My Withholding?, can also be used to do the calculation. If the result suggests an adjustment is necessary, the taxpayer should submit a new Form W-4, Withholding Allowance Certificate, to his or her employer, or adjust the amount of quarterly tax paid.
For more information on federal withholding tax, go to the IRS.gov web site.
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