Tax Withholding
TaxesThe amount of income tax your employer deducts from each paycheck and sends to the IRS on your behalf.
Example
Example: On a $75,000 salary, your employer withholds approximately $595/month in federal income tax based on your W-4 elections. If you receive a $3,000 refund at tax time, you are overwithholding by $250/month — money that could have been in your paycheck all year. Adjust your W-4 to reduce withholding and increase monthly take-home by $250.