Day 23 Of 30 Days Of Stay-At-Home Personal Finance Wins: Review & Update Your W-4

3 minute read

What if you were able to come out of this time of social distancing and economic crisis with a stronger and healthier financial life? What if you looked at this as an opportunity to take a little bit of your extra time each day to work on your finances?

Since it takes me about 35 minutes to drive to work in the morning and 45 minutes on the way back home, I have an extra 1 hour and 20 minutes of my day that I don’t have to drive while I’m working from home that I can use to accomplish something. This doesn’t even take into consideration all of the networking and social events that would usually take up some of my time throughout the week.

Obviously, your situation is different than mine (and probably a whole lot different if you have kids at home who would otherwise be in daycare), but I’m guessing that we all have at least a little extra time right now that we can dedicate to our personal finances.

It looks like we’re going to continue to practice our social distancing skills at least through April, and now is a great time to work on creating a better financial situation, so I’m giving you 30 days of stay-at-home personal finance wins throughout April.

Unfortunately, I understand that there are many who have (and who will) lose their jobs during this time of uncertainty and objectively will not come out on the other side of this with a stronger financial situation. Hopefully, many of these personal finance wins can help to lessen the blow and make things easier on them. On the other hand, I think that many of these wins are still relevant to those who are fortunate enough to be in a position to not have to worry about their job and their finances to help them build a healthier financial life.

Day 23: Review & Update Your W-4

IRS Form W-4 is filed when you start your job to help your employer figure out how much tax you should have withheld from your paycheck. A lot of times people will file this form the first time and never think about adjusting it even with significant life changes like getting married, having a baby, or a spouse deciding to stop work and stay-at-home.

A good indication that you should think about updating your W-4 is that you regularly have to pay a large amount of taxes when you file your tax return or you are owed a large refund. Of course, this is not always true as there can be extenuating circumstances.

You can often find what your withholdings are near the top of your paystub. Once you know what your current withholdings are you can use an online withholding calculator to help you estimate how you should adjust your W-4 to get you closer to breaking even at tax time. Ask HR for a W-4 and send it back to them once you have it filled out and you’re done!

This is not tax advice. Please do not take this as tax advice and please contact a tax accountant if you need help with this or any other tax matter.