When and why to update your W-4

Last updated: August 21, 2026

Applies to: US W-2 employees. Independent contractors complete a W-9 and have no withholding to update; Canadian employees update a TD1. To fill the form out for the first time, see How do I fill out my US tax forms (W-4)?

Summary: Your Form W-4 tells us how much federal income tax to withhold from each paycheck. It isn't a one-time task — after certain life events, it's worth reviewing and updating so your withholding matches your real situation and you avoid a surprise at tax time.

You complete a Form W-4 (and a state withholding form, where your state has one) when you first onboard. That form drives how much income tax comes out of each paycheck. Because it's based on your circumstances, it can drift out of date as life changes. The good news: you can update it whenever you need to.

Why keeping it current matters

The goal of the W-4 is to withhold an amount close to what you'll actually owe for the year.

  • If too little is withheld, you may owe a balance — and possibly a penalty — when you file.

  • If too much is withheld, you get a larger refund, but you've effectively lent that money interest-free all year instead of keeping it in your paycheck.

A quick review after a major change keeps your withholding in the right zone.

Common life events that are a good time to review

Consider revisiting your W-4 when any of these happen:

  • Marriage or divorce — your filing status changes.

  • A new baby, adoption, or a change in who you claim as a dependent.

  • A second job, or your spouse starts or stops working — total household income affects the right withholding.

  • A significant raise, bonus, or drop in income.

  • Buying a home or other changes that affect your deductions.

  • A move to a new state or a new work state — this can also affect your state withholding (see "Working or living in more than one state: how state taxes work").

  • You owed a lot or got a very large refund last year — a sign your withholding may be off.

How to update it

Updating your W-4 is self-service. See "How do I fill out my US tax forms (W-4)?" for step-by-step instructions. Before you make changes, the IRS Tax Withholding Estimator can help you figure out what to enter:

If you have a state withholding form, you can update it the same way. Some states have no income tax, in which case there may be no state form to update.

A note on "lock-in letters"

In rare cases, the IRS may send an employer a lock-in letter that sets a required withholding rate for a specific employee. If that applies to you, you won't be able to lower your own withholding below the level the IRS set until the IRS lifts it. This is uncommon and is driven by the IRS, not by Ascen.

Need help?

If you're not sure whether to update or you think your withholding looks wrong, see "How do I fill out my US tax forms (W-4)?" or contact support@ascen.com. We can send you a new federal or state W-4 to complete.

This is general information, not individual tax advice. Ascen cannot tell you exactly how to fill out your W-4 for your situation. For personalized guidance, use the IRS estimator above or consult a qualified tax professional.