Update your W-4′s and Estimated Taxes
While preparing their personal taxes for the year a client had an unpleasant surprise. They discovered that their family owed the government thousands of additional dollars. Why? Because their family’s W-4′s were out of date and their paycheck witholdings were too small.
This kind of crisis is easily avoided. If you start gaining substantially more income or there is a new source of income (like a new business or side-hustle), make sure you update your household’s W-4′s and quarterly estimated tax schedules.
Set up an recurring calendar reminder to have your entire household fill out fresh W-4′s and check the math on your estimated tax payments. If you wanted to be super-safe you could also create a quarterly check-in to verify there haven’t been an major shifts in income within your family that would require additional mid-year refreshes.
Take two minutes right now and set up that reminder. And then go check out this great summary article on 2020 updates to the W-4 from Gusto.