Graphic design by Deb Berger. Larger image
One way to avoid a surprise during the next tax season is to take time now for a paycheck check-up. Making sure the right amount of taxes are being taken out of a paycheck each month could keep employees from writing a check later.
More information
The IRS provides information on withholding and how to ensure you get it right.
Federal tax withholding
The Internal Revenue Service (IRS) has a withholding estimator to help employees calculate their federal tax withholdings. The tool:
- Estimates federal income tax withholding
- Shows how a refund, take-home pay or tax are affected by the withholding amount
- Helps determine the withholding amount that works for the employee
The estimator requires payslips for all jobs (and those of a spouse), income information for side jobs, self-employment, investments, etc. and your most recent tax return. The estimator is as accurate as the information provided and no financial information is saved. Payslips can be found in Workday under the "pay" icon.
"There still is time to make changes that will make an impact," said senior payroll manager Teri Kruse. "Withholding too little from a paycheck could mean an unexpected tax bill or penalty. We ask everyone to take the time and look at their payslip."
Kruse said it is a good practice for employees to review their payslip monthly, looking at tax and benefit information, for accuracy.
State tax withholding
Employees also can calculate the appropriate withholding for state taxes using a withholding estimator. The 2022 Iowa Legislature simplified Iowa's personal income tax structure from nine rates in 2022 to four this year. The two critical variables in how much tax employers withhold are salary and the tax elections an employee sets in their W-4 form. In both 2024 and 2025, the highest rate will be eliminated, so in 2026 Iowa will have a single rate possibly necessitating future adjustments.
The W-4s
Employees can confirm their state and federal withholdings in Workday under the "pay" icon (among "actions," select "withholding elections"). They can change their Iowa W-4 or federal W-4, both of which also are available in Workday. But complete your calculations first; once you click "update" for either form, the previous tax elections are gone. The W-4 can be changed anytime and as often as necessary. A knowledge base article explains how to update withholding elections.
Employees with questions about filling out the tax estimators or a W-4 form can contact payroll@iastate.edu or call 294-6556. Employees are encouraged to talk to a professional tax advisor about adjusting their withholdings, Kruse said.
