Tax withholdings: A primer

A failure to adjust your tax withholding can lead to serious problems. Your tax withholding impacts how much tax the Internal Revenue Service (IRS) and state tax authorities take out of your paycheck. The government expects taxpayer to pay their tax obligations throughout the year.

What happens if you do not pay 90% of your tax obligation throughout the year?

If you get to the end of the tax year and owe more than 10% of your tax bill, the IRS may charge additional penalties. This could result in an unmanageable tax bill. There are some exceptions, such as this year when the IRS chose to make changes to this general rule to account for the impact of the new tax law. 

How can I avoid these tax penalties?

It is important to change your tax withholding status as needed. In some cases, this may require action during the year, not just when a new year begins. Some red flags that indicate you may need to actively change your withholdings include:

  • Change in marital status. Whether you just got married or divorced, a change marital status generally signals a need to change your withholding.
  • Growth of the family. Those who welcome a child through birth or adoption will also likely need to review their withholding to ensure it meets their tax requirements.
  • New income. You should also review your status if you get a new job, add in a side job or otherwise experience a change in income.

It is also important to review your withholding if you receive a large refund. Although you want to make sure you pay the majority of your tax obligation to avoid penalties, you do not want to pay too much. That money could be earning you more through a savings account or other investment strategy.

To change your withholding, file a new W-4 with the IRS.

No Comments

Leave a comment
Comment Information
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1050 Connecticut Ave NW #500
Washington, D.C. 20036

Phone: 202-618-1873
Fax: 888-235-8405
Washington Law Office Map

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 202-618-1873
Phone: 410-497-5947
Fax: 888-235-8405
Columbia Law Office Map

Annapolis Office
839 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 202-618-1873
Phone: 410-497-5947
Fax: 888-235-8405
Annapolis Law Office Map

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 202-618-1873
Phone: 703-988-4817
Fax: 888-235-8405
Fairfax Law Office Map

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 202-618-1873
Phone: 240-599-5009
Fax: 888-235-8405
Rockville Law Office Map

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 202-618-1873
Phone: 443-743-3381
Fax: 888-235-8405
Baltimore Law Office Map