Invest in You: Ready. Set. Grow.
Invest in You: Ready. Set. Grow is celebrating Financial Literacy Month throughout the month of April.
Invest in You: Ready. Set. Grow.

Mistakes on your tax withholding can turn your refund into a costly bill. Here's what you need to know

Share
VIDEO2:0202:02
Tax withholding – what it is and how it affects your take-home pay

Taxes are inevitable.

And while the federal tax filing deadline was recently extended, the IRS still plans to collect every penny you owe.

Luckily, if you work at a company and get paid through a payroll service, your employer likely takes some of your income every paycheck and sends the money to the government for you.

The amount sent to the IRS will be based on how you fill out your W-4 form when you start your job.

But if you work for yourself, nobody will withhold for you. So make sure you're putting some money aside to pay that tax bill each quarter.

Check out this video to learn more about tax withholding and your W-4 form.

More from Invest in You:
How much you can expect to get from Social Security if you make $40,000 a year
The real 'Catch Me If You Can' con artist says this classic scam is making a comeback
Prevent tax return anxiety by following these steps

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.