Think back to your last income tax return. Did you owe Uncle Sam a lot of money, or did he give you a big refund? Whatever your situation, you can influence next year's outcome by adjusting your payroll withholding.

Money in hand

Remember the IRS Form W-4, Employee's Withholding Allowance Certificate, your employer asked you to complete on your first day? "The number of personal allowances you designate on Form W-4 determines the amount of federal income tax withheld from each paycheck," explains TaxAct spokesperson Jessi Dolmage. "The total amount withheld for the year is credited against your income tax liability."

You can modify your withholding at any time of year by submitting a new Form W-4 to your employer. In order to minimize taxes owed at the time of filing, set your allowances to zero on your W-4. To increase take-home pay but potentially owe more money at tax time, increase your allowances.

Each of the following should be counted as one allowance:

  • Yourself (if no one can claim you as a dependent on a tax return)
  • Each dependent
  • You claim the child tax or child and dependent care credits on your tax return
  • Your tax return filing status is Head of Household

If you have income from multiple jobs or your spouse works, withholding is usually the most accurate when counting all allowances on the W-4 for the highest paying job. Then claim zero allowances on W-4s for all other jobs.

Fortunately, there are free and easy solutions to help you calculate the appropriate withholding. The IRS offers Publication 505 and a withholding calculator at www.irs.gov.

TaxAct also offers a free withholding calculator. "After registering for TaxAct, click on the 'Next Year' tab to answer simple questions about your allowances," says Dolmage. "TaxAct will also complete a new Form W-4 that you can print and give to your employer."

Self-employed individuals should calculate net income and estimated taxes owed each quarter. Submit your quarterly estimated taxes along with Form 1040-ES, Estimated Tax for Individuals.

To adjust withholding for unemployment or social security payments, give Form W-4V to the payer. Submit Form W-4P to payers of pension, annuity and other deferred compensation.

In addition to reviewing your withholding when you get a new job, it's important to review your withholding whenever experiencing a major life change, such as:

  • Marriage or divorce
  • Birth or adoption
  • Increase or decrease in income e.g., you get a part-time weekend job or spouse becomes stay-at-home parent
  • Buy a house
  • Retirement
  • Change in interest or dividend income
  • Change in itemized deductions

If you live in an income-taxing state and want to adjust your state withholding, you'll need to complete the appropriate withholding form for your state.

For more information about withholding and Form W-4, visit www.irs.gov. Learn more about TaxAct's federal solution at www.TaxAct.com.

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Upcoming Tax Dates

February 10 — Social security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2017. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

February 10 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Federal unemployment tax
File Form 940 for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Employees who work for tips
If you received $20 or more in tips during January, report them to your employer Details

February 15 — All businesses
Give annual information statements to recipients of certain payments you made during 2017 Details

February 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — All employers
Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2017, but did not give you Form W4 to continue the exemption this year.

February 15 — Individuals
If you claimed exemption from income tax withholding last year on the Form W-4, you must file a new Form W-04 by this date to continue your exemption for another year Details

February 19 — Everyone
Federal Holiday (Washington's Birthday) Details

February 28 — All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2017.

February 28 — Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2017. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2017. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to 03-31.

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