IRS Urges Taxpayers to Check 2025 Withholding: Why Now Is the Time to Review Your W-4

The Internal Revenue Service (IRS) is encouraging taxpayers to review and, if necessary, adjust their 2025 federal tax withholding to avoid surprises when filing in 2026. This annual reminder is especially relevant in light of inflation-adjusted brackets, shifting income patterns, and ongoing federal tax reform discussions.

Whether you're a salaried employee, gig worker, or small business owner, reviewing your withholding strategy early in the year can help you avoid underpayment penalties—or an unexpected tax bill.

Why Withholding Matters in 2025

Your tax withholding determines how much federal income tax your employer withholds from your paycheck throughout the year. If too little is withheld, you could owe money (plus penalties) next April. If too much is withheld, you're giving the government an interest-free loan.

In 2025, changes in standard deductions, income brackets, and potential policy updates could affect your tax liability.

The IRS recommends reviewing your withholding if:

• You experienced a job change, raise, or side income growth

• You claimed new deductions or credits this year

• You owed tax or received a large refund last year

• You're adjusting to post-pandemic income fluctuations

  
  

How to Check Your Withholding

The IRS provides an online Tax Withholding Estimator that helps you:

• Estimate your 2025 tax liability

• See if your current withholding aligns with your expected income and deductions

• Determine whether to submit a new Form W-4 to your employer

  
  

It’s quick, secure, and especially useful if your income comes from multiple sources or varies throughout the year.

What CPAs and Small Business Owners Should Do

If you’re a CPA, now is a perfect time to contact clients and encourage a withholding checkup—especially those who:

• Recently changed employment

• Have investment or self-employment income

• Claimed new dependents or credits

For business owners, it’s also an ideal time to:

• Help employees understand withholding changes

• Review how contractor payments are taxed

• Educate teams on how tax policy proposals could affect 2025 returns

  
  

How Bizora Can Help

At Bizora, we equip CPAs, business owners, and financial teams with:

• Tools to forecast year-end tax liabilities

• Guidance on using IRS resources effectively

• Strategies to avoid penalties and balance cash flow through smart tax planning

  
  

Make Withholding Work for You in 2025

Waiting until next spring to adjust your tax strategy often leads to rushed decisions or costly mistakes. Checking your withholding now allows you to make small changes with big results.

Visit bizora.ai to access tools and insights that help you stay compliant, reduce surprises, and support smarter financial planning all year long.