Are You Under Withheld on Federal Taxes?

Many taxpayers continue to face balances due at tax time because their federal withholding has not kept pace with changes in tax law and income. Small increases in take-home pay over time often reduce withholding without taxpayers realizing it, resulting in an unexpected amount owed when filing a return.

This issue is especially common for taxpayers who earn overtime, tips, have multiple jobs, or experience income changes during the year. Reviewing and updating Form W-4 can help ensure the correct amount of tax is being withheld from each paycheck and reduce surprises at tax time.

Regularly reviewing withholding, particularly after income or life changes, is an important part of proactive tax planning and can help avoid penalties and large balances due.

Source: IRS Guidance on Updating Withholding https://www.irs.gov/forms-pubs/how-to-update-withholding-to-account-for-tax-law-changes-for-2025