What should my withholding be to not make a payment at tax time?

DATE_PUBLISHED

Determining the exact amount of withholdings you should be making in order to avoid any payment at tax time can be difficult to determine, so most people estimate what their expected liability will be. If the goal is simply to receive a refund, you may opt to overshoot your expected liability and get money back once the return is filed. In most cases however, this wouldn’t be suggested as you just end up giving the government an interest free loan.

The general rule of thumb in order to avoid an underpayment penalty, is to pay the lesser of 90% of the taxes you owe by the end of that year or an amount equal to 100% of your tax liability for the previous year.

Subscribe to Taxfyle Resources & Tax Tips

Get the latest posts delivered right to your inbox

Thank you for subscribing!
Oops! Something went wrong while submitting the form.
5 Tax Mistakes That Trigger Audits
Personal Taxes
Don't rush through your taxes. There are simple mistakes that can trigger audits. Taxfyles is a stress-free, safe way to file taxes.
3 minute read
A Tax Guide to Severance Packages and Taxes
Personal Taxes
If you received a severance package after losing your job, you may need to see how it involves your taxes. Our blog post can help.
5 minute read
Free Tax Filing Services vs. Premium Services
Personal Taxes
What's the difference between free and premium tax filing services? Free is convenient but premium services can help more.
5 minute read

File simpler.

File smarter.

File with Taxfyle.