Tax Experts Urge Midyear Checkup to Adjust 2026 Withholding Using 6-Month Income

Q: With new tax-free overtime and tips, are you leaving money on the table by not adjusting your W-4 form now?

Yes—if you expect meaningful tip or overtime income, it is worth checking your W-4 now, because you may be over-withholding federal income tax. The key point is that these are generally new federal deductions, not truly “tax-free” wages at the paycheck level. Tips and overtime can still be subject to normal payroll withholding, Social Security and Medicare taxes. But because the deductions can lower your final income tax bill, your current W-4 may be set too high, causing you to send more to the IRS during the year than necessary and wait for it back as a refund. That said, not everyone should automatically cut withholding. The U.S. tax system is pay-as-you-go, and underpayment penalties can apply if too little is paid during the year. A mid-year review matters even more if you have multiple jobs, side income, investment income, or large changes in earnings, because the new deductions for tips and overtime have limits and phaseouts. Tax experts such as Jackson Hewitt’s Mark Steber recommend a mid-year “practice run”: project your full-year income from your first six months of pay, then use the IRS Tax Withholding Estimator or a similar calculator. If the estimate shows over-withholding, submit a new W-4 so more money stays in your paycheck. If it shows a shortfall, increase withholding or make estimated payments. For workers with straightforward W-2 income, this can be a simple cash-flow fix. For more complex situations, a tax professional is the safer move.

1 articles · Updated · INFORUM · Jul 21

Midyear is the best time to test next season’s tax position, Mark Steber of Jackson Hewitt said, urging taxpayers to review finances now rather than wait for filing season.
Steber recommends doubling the first 6 months of earnings and plugging that estimate into an online tax calculator to gauge whether current withholding is too high or too low.
Withholding changes can spread out any tax bill over the rest of the year or free up an extra $50 or $100 per paycheck instead of leaving that money tied up in a large refund.
He also advised taxpayers to work with a trusted tax professional as part of a broader midyear financial checkup.

Sources

Right100%

INFORUM2d ago

Mark Steber Urges Midyear Financial Checkup for Tax Optimization

With new tax-free overtime and tips, are you leaving money on the table by not adjusting your W-4 form now?

A new $40,000 tax deduction for homeowners is available. Should you switch from the standard deduction to save more on your 2026 taxes?

The new $1,000 'Trump Accounts' for kids are here. Do you know how to secure this federal benefit for your family?

Sources

1 total

Right100%

INFORUM2d ago

Mark Steber Urges Midyear Financial Checkup for Tax Optimization

Tax Experts Urge Midyear Checkup to Adjust 2026 Withholding Using 6-Month Income

Summary

Sources

Insights

Related Stories

Sources

Related Stories