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Tax Filing
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Personal
Understanding Tax Withholding
February 28, 2026
Introduction
Most filers either over-withhold (and get a large refund — essentially an interest-free loan to the IRS) or under-withhold (and owe at filing time). The sweet spot is closer to zero.
How withholding works
Your employer estimates the tax you owe based on the W-4 you submitted, then sends that estimate to the IRS each pay period.
Major life events — marriage, a second job, a new child, buying a house — are all reasons to update your W-4.
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