Your Money Matters: Simple steps to prevent a surprise tax bill

Tax season can be stressful, especially if you end up owing hundreds or even thousands of dollars. But with a little planning, there are ways to avoid that situation next year and even increase the amount of money in each paycheck.

The IRS Tax Withholding Estimator is a tool that can help taxpayers better understand their federal tax withholding and avoid unpleasant surprises. It’s available at irs.gov/individuals/tax-withholding-estimator.

To use the tool, gather recent pay stubs for you and your spouse, if applicable, as well as any other income information such as Social Security benefits. The estimator walks users through a series of questions and calculations, then shows whether you're likely to owe money or receive a refund based on your current withholding.

The process can be short, depending on how quickly you can access your income details. Once you’ve completed the estimator, you can use that information to adjust your Form W-4 with your employer.

At some workplaces, like here at Griffin Media, these adjustments can be made online in just a few seconds.

If the estimator shows that you're likely to owe money next year, increasing your withholding now can reduce or eliminate a future tax bill. On the other hand, if you're expecting a refund, decreasing your withholding will allow you to take home more money each pay period.

Some people prefer receiving a large refund, but financial experts often recommend adjusting withholding to reduce the size of that refund. That way, you have more control over your cash flow throughout the year—and potentially more money in your pocket when you need it.