Adjust your wage withholding for 2013?
If you do nothing, your employer will continue to withhold federal income taxes based on the information you’ve already provided (your filing status, withholding allowances, etc.). But you may want to make a change if:
- Your family has changed. You can reduce withholding and increase your take-home pay if you have a new baby or expect one in 2013.
- Your residence has changed. If you bought a home recently or expect to buy one very soon, you’ll likely have deductions for mortgage interest and real estate taxes that can lower your tax bill. If you are selling soon, the opposite strategy may apply if you plan to rent after the sale.
- Your income has changed. You’ll increase withholding if your spouse has returned to work but reduce it if your spouse left the job market.
- You expect to owe the new 3.8% net investment income tax. Technically, this is an additional Medicare tax, but you can cover this obligation by extra income tax withholding.
Complete a new Form W-4, Employee’s Withholding Allowance Certificate, and give it to your employer; it is not filed with the IRS.