An expert advises that a 'back of the napkin math' can reveal if you may receive an unexpected tax bill.

• Experts advise that if you haven't paid enough taxes for 2024, there is still time to take action to avoid a surprise tax bill.
• According to certified financial planner Tommy Lucas at Moisand Fitzgerald Tamayo, employees can use "back of the napkin math" to verify their 2024 withholdings if their circumstances are similar to the previous year.
• If your tax situation has changed from 2023, you can use a free withholding tool from the IRS.

Experts advise that if you haven't paid enough taxes for 2024, there is still time to take action to avoid a surprise tax bill.

Typically, employees pay taxes through deductions from their paychecks. Additional income necessitates quarterly estimated payments. Overpaying usually leads to a refund, while underpaying triggers a balance due.

Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida, advised employees to use "back of the napkin math" to verify their 2024 withholdings, assuming their circumstances are similar to 2023.

Here's how to do it.

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One way to estimate tax withholding

To determine your federal taxes for 2024, look to line 24 of your 2023 tax return. If your income and tax circumstances have not changed, you can expect a similar amount owed in 2024, as explained by Lucas.

Next, you will need to review your pay stubs.

If you have paid about 75% of your last year's taxes by September, you will be close to meeting your tax obligations, assuming the same tax laws apply.

Your tax situation can change from year to year due to various factors such as a second job, higher income, divorce, marriage, or the birth of a child, as Lucas pointed out.

To ensure accurate withholding in 2024, a more comprehensive analysis is necessary, as stated by him.

IRS tax withholding estimator

It is advised by experts to utilize the "tax withholding estimator," a free tool from the IRS, periodically if your tax situation has changed this year.

The tool takes into account your marital status, dependents, number of jobs, other sources of income, most recent pay stub, taxes withheld, estimated tax payments, and other relevant details.

The IRS offers a pre-filled Form W-4 that you can submit to your employer to adjust your withholding.

Lucas suggested paying the IRS directly to cover the 2024 tax shortfall.

If you don't monitor your taxes, you may receive an unexpected bill with penalties and interest, advised Mark Steber, the chief tax information officer at Jackson Hewitt.

What to know after updating your withholding

To ensure that the change in tax withholding reflected in future paychecks through the end of the year, it is important to make sure that the update on Form W-4 is accurate, as advised by Lucas.

If you withhold too much in 2025, you will need to resubmit Form W-4 again in January.