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Midyear tax tip #3: Adjust withholding

June 23, 2010

Now that the 2010 tax year is half over, it's time to ask yourself some questions.

Did you end up writing a large check to Uncle Sam that included an underpayment penalty?

Did you receive a large refund check?

If you answered "Yes" to either question, The Missouri Tax Guy Bruce says it's time to make a Midyear Tax Move.

The key is to send the IRS only enough money to avoid interest and/or penalties. It's easy to do by adjusting your withholding.

If you think that you'll owe more taxes this year, adjust the number of allowances (fewer mean you'll have more taxes taken out of your paycheck) on your W-4 or pay more in estimated taxes.

To cure an overpayment situation that you may be facing, consider increasing the number of allowances claimed. That will get you, instead of the IRS, more money each payday.

By making the appropriate correction, you'll get the benefit of owing the IRS the right amount.

More midyear tax tips on their way: Thanks to Bruce and his always timely tip to reevaluate your withholding.

If you have a tax move we can make now to help reduce our upcoming 2010 tax bill, we'd love to hear from you. I'll be posting the tips, one a day until we run out.

If you're succinct, I'll take your tip via Twitter @taxtweet. Got a bit more to say, post it on the ol' blog's Facebook page.

And if you want a chance to win a New Yorker desk diary, check out the details here (the entry deadline has been extended to June 27).

Related posts:

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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