News & Trending Tax News

The IRS Says Every Worker Should Check This One Thing on Their Paycheck

You could avoid an unexpected tax bill or get more money into your pocket before the year ends.

By Chris Lewis, CEPF , Edited by Becca Borawski Jenkins

Updated Oct. 12, 2026

Add Us On Google

The income tax that comes out of your paycheck disappears before it reaches your bank account, so it's easy to ignore and assume it's right. But it could be too much or too little, and you may not find out until you file your tax return.

That's why the IRS is urging workers to do a paycheck checkup as part of its National Payroll Week push. With several months left in the year, you have time to correct your withholding gradually and lower your financial stress, instead of discovering at tax time that you owe a much bigger bill than expected.

The goal isn't to get the biggest refund available. It's to have the right amount of federal income tax taken from your paycheck throughout the year.

Set up eligible direct deposit - pocket up to $400

Set up an eligible direct deposit with SoFi Checking and Savings and you could earn a bonus of $50 or $400.¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit received within 25 calendar days of your first Eligible Direct Deposit of $1 or more. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 5/15/2026 and will be available through 12/31/2026. Full terms at <a href="https://www.sofi.com/banking/">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 0.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 9/23/26. Fees may reduce earnings. Additional information can be found at <a href="https://d32ijn7u0aqfv4.cloudfront.net/wp/wp-content/uploads/raw/SoFi-Bank-Rate-Sheet-September-23-2026.pdf">http://www.sofi.com/legal/banking-rate-sheet</a>. Make the switch, set up eligible direct deposit, earn the bonus. It basically takes no extra work at all other than following these steps.

Why people are switching: This account earns up to an insane 4.20% APY² Earn up to 4.20% Annual Percentage Yield (APY) on one SoFi Savings account with a 0.90% APY Boost (added to the 3.30% APY as of 9/23/26) for up to 6 months. Open your first SoFi Checking and Savings account and receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 12/31/26. Rates are variable, subject to change. Terms apply at <a href="https://www.sofi.com/banking/#4">sofi.com/banking#4</a>. SoFi Bank, N.A. Member FDIC. on savings for up to six months (3.30% APY standard + 0.90% APY boost) on top of that $50 or $400 bonus.¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit received within 25 calendar days of your first Eligible Direct Deposit of $1 or more. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 5/15/2026 and will be available through 12/31/2026. Full terms at <a href="https://www.sofi.com/banking/">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Eligible Direct Deposit can earn 3.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.30% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 0.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 9/23/26. Fees may reduce earnings. Additional information can be found at <a href="https://d32ijn7u0aqfv4.cloudfront.net/wp/wp-content/uploads/raw/SoFi-Bank-Rate-Sheet-September-23-2026.pdf">http://www.sofi.com/legal/banking-rate-sheet</a>. That's way better than the measly 0.38% APY (as of 06/15/26)³ Based on <a href="https://www.fdic.gov/national-rates-and-rate-caps">this</a> FDIC data, as of 6/15/26. national average savings accounts offer.

No monthly fees and no surprises. Open your account and earn up to a $400 bonus

What is National Payroll Week?

National Payroll Week, which ran Sept. 7–11, is part of the IRS's push to convince workers to check their tax withholding before year-end.

The agency recommends reviewing withholding after major life or income changes. Still, a paycheck checkup may also help catch a problem before it becomes an unpleasant surprise at tax time.

Shopping for cheaper auto insurance? Enter your zip code here to get started.

Your paycheck is already paying your federal income tax

The federal income tax system works on a pay-as-you-go basis. Instead of waiting until you file your tax return to pay everything you owe, you generally pay taxes throughout the year as you earn income.

If you're an employee, that usually happens through withholding. Your employer withholds federal income tax from each paycheck and sends it to the IRS on your behalf. The amount is based in part on your earnings and the information you provide on Form W-4, Employee's Withholding Certificate.

That means you pay taxes throughout the year through the amount taken out of your paycheck.

If you pay too little, you could owe a large amount when you file your return. Depending on your circumstances, you could also face an underpayment penalty.

But withholding too much is just as bad. If you consistently have more tax taken out than you owe, you're giving the government the use of that money throughout the year without earning interest on it. You eventually get the excess back as a refund, but in the meantime, that money isn't available in your paycheck for bills, savings, debt payments, or investments.

These changes could throw your withholding off

If your circumstances change, the W-4 that worked well last year may no longer serve you. The IRS points to several situations when you should check your withholding:

You started or left a job: Changing employers may change how withholding is calculated.
You or your spouse started or stopped working: A change in household income may affect how much federal tax you must pay throughout the year.
You started a second job: Multiple jobs may complicate withholding because the total household income matters.
You got married or divorced: A change in filing status or household income may affect how much you owe.
You had a baby or adopted a child: New dependents may change your tax calculation.
Your income changed substantially: Significant raises, pay cuts, bonuses, and commissions could leave your existing withholding out of step with your expected tax bill.

You don't need to wait for one of those events. The IRS recommends checking withholding periodically, particularly when tax laws or your financial circumstances change.

Resolve $10,000 or more of your debt

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.⁴ Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 45% before fees, or 20% including our fees, over 24 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Depending on your state, we may be available to recommend a local tax professional and/or bankruptcy attorney. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating. "Debt-Free" applies only to enrolled credit cards, personal loans, and medical bills. Not mortgages, car loans, or other debts. Results vary.

The IRS has a free tool to check your withholding

The good news is that you don't have to calculate the right withholding amount by hand.

The IRS offers a free Tax Withholding Estimator that uses information such as your recent pay statements, income, deductions, and credits to estimate whether your current withholding is on track.

To use it, you need your latest pay information handy. The estimator checks your year-to-date and expected withholding for the rest of the year. It also verifies your estimated tax liability and calculates whether you're on track for a refund or an amount owed.

If the numbers show that your withholding needs to change, the next step is straightforward: Complete a new Form W-4 and give it to your employer.

A W-4 tells your employer how much federal income tax to withhold from future paychecks, so you don't need to file the W-4 with your tax return.

Don't forget about income that doesn't come with withholding

Not everybody gets all of their income through a traditional paycheck.

Gig workers, freelancers, and self-employed people often don't have an employer withholding federal income tax from their payments. Other income, including certain investment and rental income, is also taxable outside of ordinary paycheck withholding.

In those cases, you may need to make quarterly estimated tax payments instead.

If you have both a regular job and side income, the IRS says you may sometimes avoid separate estimated payments on gig or self-employment income by asking your employer to withhold additional tax from your paycheck. To do it, submit a new W-4.

October is a better time to check than December

A withholding mistake isn't easier to fix as the year gets shorter.

If you're underwithholding, discovering the problem earlier gives you more paychecks to spread an increase in withholding over. If you're overwithholding, correcting it sooner may put more money back into your regular paychecks instead of waiting for a refund after you file.

Make Money: 8 things to do if you're barely scraping by financially

Bottom line

Now that the IRS has used National Payroll Week to remind workers to check their withholding, you don't need to make the biggest refund possible or make your tax bill disappear completely.

To put extra cash in your pocket, make sure the amount taken from your paychecks throughout the year is reasonably close to what you'll actually owe. A few minutes with the IRS Tax Withholding Estimator now allows you to make that adjustment with enough time left in the year to make a difference.

More from FinanceBuzz:

Intro APR on purchases and balance transfers
$0 annual fee
Apply Now

Get a 0% intro APR for 15 months on purchases and balance transfers; balance transfer fee applies. Then 17.74% - 26.74% Standard Variable Purchase APR applies, based on credit worthiness
INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300
Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases
Redeem cash back for any amount. No annual fee
Terms and conditions apply

4.7

Apply Now

on Issuer's secure website

Read Card Review

Intro Offer

INTRO OFFER: Unlimited Cashback Match for all new cardmembers. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300

Annual Fee

Why we like it