When go to work for “the man,” you will be expected to fill out a Form W-4. This is a form provided by the IRS that helps employers figure out how much money should be taken out of each paycheck and sent on to Uncle Sam. The way you fill out your W-4 determines how much of your paycheck is withheld. And how much of your paycheck is withheld determines how much money you owe in April, or how big of a refund you get back.
For many, the sweet spot is figuring out the withholding so that you don’t owe a lot of money come tax time, but also so that you don’t have a huge refund, which is tantamount to giving the government an interest-free loan. The idea is to get yourself as close to 0 as possible. If you want to adjust your withholding to better reflect your tax liability, all you have to do is fill out and turn in a new W-4.
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