Adjust Your Withholding With a New W-4: Too Much Withheld or Owe Every Year?

You owe or get a refund because of the difference between the tax withheld from your pay during the year and your actual tax when the return is done.

If too little is withheld, you owe at filing.  If too much is withheld, you get the difference back as a refund, which is really your own money returned after the government held it all year.  Neither result is a sign you did anything wrong.  It just means the withholding did not match your tax.

Your employer withholds based on the Form W-4 you gave them.  A new W-4 is how you change the amount.  The IRS also gives you a withholding estimator to check the result.

The W-4 asks for your personal information and filing status, then has steps for multiple jobs, dependents, and other adjustments, and you sign it.

The form no longer uses the old "allowances" method.  Instead it walks through a few steps.  If you only have one job, and your household is simple, you may only complete the first steps and sign.  If you have more than one job, or a working spouse, the multiple jobs step matters, since each employer withholds as if it were your only job.

Your filing status on the form matters too, since it sets the baseline.  The extra fields let you add more withholding per paycheck, or claim adjustments for things like dependents or deductions, and the IRS estimator can help you decide what to enter.  Bring the form and your latest pay stubs and we go through it with you.

Alabama has its own withholding rules, so a change to your federal W-4 does not automatically change your state withholding.

Alabama employers withhold state tax based on their own state form.  Alabama has its own rules, and we check how they apply to your situation.  Since Alabama lets taxpayers deduct federal income tax paid, a federal change can also change the Alabama return.

If you are new to work, see first-time filers and teen jobs. If you have side income, look at estimated quarterly taxes too.