When the tax returns are completed for the year, don’t just put them in the file drawer and forget about them. Use the data provided to make some good decisions about 2020 withholding and saving patterns.
This is a good time for you to review a recent paystub from 2020. With tax return results in hand, you can estimate whether you need to adjust your W-4 to change federal withholding, either reducing large refunds or withholding a bit more each pay period to better cover 2020 taxation. Your CPA can assist with this evaluation.
Lastly, refer to your paystub to ensure you are taking full advantage of deferrals to retirement plans, using the table below to view the annual maximums allowable. Your plan administrator allows you to adjust deferral percentages throughout the year.