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Author: TMFDj111 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Monitoring Taxes Owed thru Year Date: 3/21/2003 6:52 AM
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I've read a few posts about fellow Fools tracking their taxes throughout the year to avoid under-witholding or over-witholding taxes by tax time.

Welcome to TMF! Our purpose is to educate and amuse, and from time to time we even come up with lucrative financial advice.

I do this monitoring for my own taxes. The procedure I prefer is to use last year's tax forms to calculate this year's taxes. For example, when I get my pay stub for March, I'll figure out my pay for the year, and plug and chug with that number to ensure I'm okay for this year's taxes. If I'm too far out of whack, then I make an adjustment to my withholding to get back on track.

There are problems with this approach. For example, the tax code changes from year to year -- sometimes dramatically. Also, makeing changes to withholdings sometimes yields surprising results. However, this approach seems to be the least awful of several poor choices.

David Jacobs
TMFDj111
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