Adjust Your Tax Withholding
During tax season, it’s always good to remember what Jesus said, “… render to Caesar the things that are Caesar‘s, and to God the things that are God’s.”
If you’re like most Americans, you’re expecting a tax refund this year. But I want to remind you that we’re only required to render what we owe. Nothing more. A refund is simply getting the money back that you loaned interest-free to Uncle Sam. Adjusting your withholdings prevent these scenarios and can be done any time during the year. But the earlier in the year you adjust, the greater the impact for next year’s filing.
Life affects your taxes. Any changes in income may alter your tax bracket and liability. If you or your spouse take on an extra job, face unemployment for a period of time, and get re-hired, your withholdings may need to be checked. Calculate your combined income then allow one spouse to claim all of them, or divide between both W-4s.
Getting married has tax benefits but a divorce will take you back to single status. Both require a W-4 adjustment for accurate withholdings.
If you have a baby or adopt, claim the additional allowance and reduce your withholding. Failing to adjust your W-4 will likely cause you to have more withheld than necessary.
Everyone would prefer a refund over having to pay taxes. But, a refund is money that could have been applied to debt, savings, or investing.
So, adjust your withholding on paper or electronically, so you can put your money to work for you. Instructions are provided at the IRS Tax Withholding webpage. And, TurboTax has a W-4 Withholding Calculator to help you make adjustments.
The goal is to avoid overpaying or underpaying. If you prefer to underpay, then make sure you save monthly into a designated account so you can pay your taxes on time and render unto Caesar what is rightfully his.
If you have questions about your finances or need someone to pray with you, call the Crown Helpline at 800-722-1976. Our staff is standing by to talk to you!