THE IRS has urged Americans to take action now to avoid affecting how much money they receive or owe during the upcoming tax season.
Some are already preparing for a looming September 15 deadline to avoid $500 fines and daily fees next spring.
A little over three months remain in 2026, and taxpayers have been encouraged to double-check their payroll information to avoid issues.
They should ensure that their federal income tax withholding amounts are accurate, according to the IRS, as too much or too little being withheld could lead to a serious dip in bi-weekly check amounts or an increase in money owed by the time April rolls around.
It’s standard practice for most employers that federal income tax is paid throughout the year by an employee as they earn.
Employers withhold the federal income tax from each paycheck.
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The amount withheld is determined by employee earnings and information they provide on a W-4 form.
If too much is withheld by an individual, their paychecks are significantly smaller throughout the year, impacting monthly budgets.
However, there’s typically a bigger refund check during tax season.
With too little withheld, monthly paychecks are bigger, but there’s a possibility Americans who do this could owe much more to the IRS.
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To prevent any unwanted outcome, the IRS advises taxpayers to check their withholdings periodically, especially after a life change or tax law change.
This could include starting a new job, leaving an old one, working multiple jobs, getting married, getting divorced, having or adopting a child, or having a sharp increase or decrease in income.
To help make finding the right withholding amount easier, the IRS even has an online Withholding Estimator tool.
It uses information like pay statements, income, deductions, and credits to estimate the appropriate withholding.
Should a change be needed, Americans can complete a new W-4 form and submit it to their employer.
It’s also important to note that taxpayers have personal preferences.
Some purposefully withhold too much throughout the year so they can ensure a massive refund check on April 15.
Similarly, others decide to withhold very little to have more accessible income every month throughout the year and then gradually set cash aside to pay the IRS when they file their returns.
More than 50,000 residents of a US state are even still waiting for this year’s tax refund due to a “40-year-old” lag.
A new IRS rule could increase refunds for some by as much as $1,000, too.