{"id":10120,"date":"2015-03-20T00:00:00","date_gmt":"2015-03-20T00:00:00","guid":{"rendered":"https:\/\/getirshelp.com\/blog\/should-you-reduce-your-w-9\/"},"modified":"2026-07-27T14:54:27","modified_gmt":"2026-07-27T14:54:27","slug":"should-you-reduce-your-w-9","status":"publish","type":"post","link":"https:\/\/getirshelp.com\/blog\/should-you-reduce-your-w-9\/","title":{"rendered":"Should You Reduce Your W-9?"},"content":{"rendered":"

If you're reading this, something about your tax situation has you worried. That's fair \u2014 the IRS is intimidating until you know how the rules actually work. I'm Darrin Mish, a Tampa tax attorney. I've handled cases like yours for 32 years. Let me walk you through it.<\/p>\n

You fill in a W-4 each time you start a new job. \u00a0Using your W-4, your employer calculates the amount of withholding to apply to your paycheck each month. \u00a0If you withhold too much, the IRS refunds you the excess at tax season each year. \u00a0If you withhold too little, you have to pay the IRS the difference. \u00a0Most Americans withhold too much. \u00a0That is why the average amount of refunds per taxpayer\u00a0based on\u00a0last year’s taxes collected is $2,847. \u00a0Click here to watch or read more information on IRS Back Taxes.<\/a><\/p>\n

Obviously you should not be paying Uncle Sam more than you are taxable. \u00a0To change the amount of withholding, you need to change your W-4<\/a>. \u00a0Most of us forget to make the necessary changes after a significant life event that may reduce your taxable income such as the birth of a child or getting married. \u00a0That is one main reason why we pay too much withholding.<\/p>\n

So should you reduce your W-4? \u00a0Naturally, you should consider changing your W-4 only if you are paying too much withholding. \u00a0Reducing your W-4 means reducing the amount of refund you receive each year. \u00a0Getting a lump sum refund of about $2,847 sounds good but actually, it’s the amount your should not have paid the IRS in the first place. \u00a0So deciding to reduce your W-4 should depend on what you would do if you do not receive a refund.<\/p>\n

Consider how much your monthly income would be if you did not withhold the $2,847. \u00a0It would immediately increase by $237.25 per month. \u00a0If you are not the type of person that can discipline yourself to spend the $237.25 wisely or better still, save the entire amount each month, then it’s better if you do not change your W-4. \u00a0\u00a0It’s better to let the government take a little more every month and refund it back to you at the end of a year than you spend it all on unnecessary things. \u00a0\u00a0After all, if you can get by with\u00a0the withholding at your present amount, it means you do not need the extra $237.25 anyway.<\/p>\n

Then when the government refunds it to you in one lump sum of $2,847, you could use it for something beneficial like paying off your credit card debts. \u00a0The only thing you would lose out on is the interest on that $2,847 each year. \u00a0But that may be a small price to pay for not allowing yourself to fritter\u00a0away your hard earned money.<\/p>\n

If you do decide to reduce your W-4, I’d like to suggest two things you could do with the extra $237.25 each month.<\/p>\n

Firstly, you may want to start a 401(k) to save for your retirement. \u00a0At 6.5% compound interest, your monthly savings of $237.25 per month could end up being more than $3,000 in one year’s time.<\/p>\n

Secondly, pay off your debts. \u00a0Most of us have credit card debts. \u00a0Paying $237.25 per month towards your credit card is a good practice. \u00a0If you have a credit card balance of $2,500, a monthly payment of $237.25 could pay off your entire balance within one year.<\/p>\n

So be wise in deciding whether you should\u00a0make changes to\u00a0your W-9.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you're reading this, something about your tax situation has you worried. That's fair \u2014 the IRS is intimidating until you know how the rules actually work. I'm Darrin Mish, a Tampa tax attorney. I've handled cases like yours for 32 years. Let me walk you through it. You fill in a W-4 each time […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[591],"tags":[],"class_list":["post-10120","post","type-post","status-publish","format-standard","hentry","category-irs-news"],"_links":{"self":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/10120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/comments?post=10120"}],"version-history":[{"count":2,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/10120\/revisions"}],"predecessor-version":[{"id":26954,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/posts\/10120\/revisions\/26954"}],"wp:attachment":[{"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/media?parent=10120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/categories?post=10120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/getirshelp.com\/blog\/wp-json\/wp\/v2\/tags?post=10120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}