What are tax withholdings?

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If you are an employee, you have certainly noticed the taxes taken from your paycheck every month. The amount to be withheld is determined by the responses provided on the Form W-4 completed when you were first hired. The amounts withheld by your employer are then remitted to the government on your behalf.

If you’re self-employed you are responsible for withholding your own taxes and paying your estimated taxes throughout the year.

In some instances, you will want to contact your company’s human resources department in order to update or correct the information entered on your Form W-4. Common instances in which this may occur include a change in filing status (e.g. you were recently married or divorced) or you have recently had a child. You may also want to update your Form W-4 if you noticed you received a large refund and have been withholding too much.

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