The kids are back to school and life is a little slower now. It’s a good time to look at your year-to-date federal and Colorado withholdings to make sure that you won’t have either a large balance due at year-end or a large overpayment on April 15, 2018.
Did you get a large refund with your 2016 return? Are your work and tax circumstances about the same for 2017? If so, perhaps you should reduce your withholding for the remainder of 2017. The ideal payroll withholding situation is to have just enough tax withheld to (1) avoid underpayment of estimated tax penalties and (2) avoid a large balance due on your 2017 tax returns.
Just stop by your payroll office and submit a new Form W-4 to change your withholding.
If you receive income that is not subject to withholding, you may need to either increase your withholding for 2017 or make estimated tax payments. If you make estimated tax payments, now is a good time to reassess your third and fourth quarter estimated tax payments or determine if you need to make additional estimated tax payments. This will allow you to avoid underpayment of estimated tax payments or to make sure that you don’t overpay your taxes for 2017.
You tax advisor can help you determine the amount of required withholding and/or estimated tax payments for 2017.