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This file was generated by Descript 

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Microphone (Shure MV7): Hello, everyone.

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Welcome to the episode.

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This was a little bit of an unplanned
episode we're at mid year, and this is a

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fantastic point to check in on something.

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And I wanted to make
sure we didn't miss it.

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So consider this episode,
your formal reminder.

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To take a look at your withholding for
the year, or if you're self-employed.

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Take a look at your year to
date earnings and what you have

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sent in for estimated payments.

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And see where things stand.

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Right?

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We are halfway through 2024.

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I'm not really sure how that happened, but
we've got half a year left to fix things.

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If our withholding or the amount
of taxes we're planning for

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is a little bit off course.

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So what made me think of this?

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I was working on a return this week.

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Where the taxpayers W2.

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The amount of withholding.

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Was only 4%, 4%.

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And I was like, oh no,
this is, this is troubling.

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Um, the other thing was their W2
was lower by a pretty decent chunk

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this year, from the prior year.

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And in prior years.

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Withholding has been around 14, 15%.

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Perfect.

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So in talking to the client.

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One of the big changes this year and
the reason for the reduction in income.

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Was that difference was
normally from a bonus.

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And the company didn't
do so well last year.

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So they didn't do bonuses.

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If you have ever worked somewhere
where you may get a bonus.

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You'll notice there tends to
be more tax withheld from them.

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That's incredibly common
that's standard practice.

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So in these earlier years, when a large
chunk of the income was from bonuses.

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Then there was extra tax
being withheld pretty much.

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So everything sort of leveled out.

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For this year.

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No bonus.

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No extra withholdings.

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And I'm not sure what changed if
there was a change on their w four.

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Um, the taxpayer swears, they
didn't submit anything new.

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But as we know that form changed a
couple years ago, I think it was in 2020.

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So, if you haven't updated your
w four in a while, it might be

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worth it to take a look at that.

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So they weren't sure what had changed
or why the amount would only be 4% and

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they hadn't noticed it during the year.

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So long story short.

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In these earlier years, if it had
been quite low in earlier years, it

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wouldn't have been noticed really
because we have that extra amount held.

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But for this year, we were only at 4%.

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And so this is the reminder to you.

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That you should take a look
at your most recent pay stub.

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And divide the amount of federal
withholding by the amount of

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wages and see where you are.

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If you are under 10%.

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Dig into that a little bit and
find out if that seems correct.

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The lowest tax brackets, 10%.

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And you can end up with an
effective rate of less than that.

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There might be a reason for it.

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There might be some tax
planning where maybe you've

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made tax payments on your own.

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Your spouse is self-employed.

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Something like that.

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Perfect.

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But consider this your reminder
to take the most recent pay stub.

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And look at that percentage
and just see where things are.

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If they seem really low, look into it now.

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It is always better to find
these things and course correct

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midway through the year.

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Then make it all the way
to the end of the year.

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Additionally, I know you guys are
not going to want to hear this.

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Um, but you have to, and I'm
sorry, you can, you can blame me,

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but maybe you'll thank me later.

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If you open a paycheck.

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And, you know, something
has changed, right?

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Maybe your role changed or there's
a new payroll processor at your job

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or whatever, if anything has changed
or even if it didn't, but if you

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open a paycheck and do you notice.

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At the amount of taxes taken out
seems much lower than it was before.

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Question that and look into that.

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So if there's a sudden change and you
didn't request anything to change.

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That warrants a little more investigation.

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If you haven't looked at
the updated w four form.

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It used to be, you just
picked a number, right.

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And you picked a number and the number
you picked determined if they held more or

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less from your taxes based on exemptions.

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Now it has several questions it's
designed to be more accurate, but what

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it is actually done is created a little
bit of a dumpster fire and confused.

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A lot of people.

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And a lot of people have outdated
information on there now.

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So take a look at this new form.

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It'll ask for things like if you have
more than one job, Um, because it's not

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uncommon that if someone has more than
one job, that they don't withhold tax at

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one of the places or between the two of
them, they might end up over withholding.

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It's going to ask about.

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Children, it's going to
ask about or dependence.

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It's going to ask about additional income.

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So, if you haven't updated your w four.

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In several years with your job.

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Talk to HR.

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So this is your reminder.

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Look at your pay stub, review it.

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See what percentage are
withholding is that.

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You can even take a look at that
compared to last year and see if

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you seem like you're on track.

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If you're way off course.

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If nothing else has changed.

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And, you know, last year
you received a huge refund.

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You might want to have less taken out.

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But whatever you do, just take a minute.

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And look at that most recent pay stub.

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And adjust accordingly.

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So.

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I hope someone found this helpful.

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I hope it was a good reminder
to someone out there.

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And if you haven't been
withholding enough, don't panic.

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Uh, you can adjust it.

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You can just adjust for the rest
of the year and get back on track.

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I hope everyone has had a
fantastic first half of the year.

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And we are on track to have
an even better second half.

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As always.

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I will talk to you guys next week.

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I hope everyone has a fantastic weekend.