It's important to take time to adjust your withholdings when your income changes. This can protect you from owing any money to the IRS at the end of the year. Often people fail to realize that something changed the income that they will be reporting at the end of the year. When you get a really good bonus, your not going to sit and think about the tax implications. It is much more fun to plan out how you are going to use the extra money. It takes just a few minutes to check and adjust your withholdings so that you do not get hit with surprise taxes at the end of the year.

If you take on an extra job or you freelance you will need to consider that tax implications as well. A new job or a raise is another time to make the adjustments. If you have a major life event such as getting married or having a child you should take the time to make the see if you need to make any changes as well. If the change is a permanent one you should adjust your budget and increase your retirement savings.

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