After tax season, many people find themselves in the position where their tax preparer/accountant recommends that they change their withholdings.  This typically happens when a person has prepared their return and either has a large refund or balance due.  The rule of thumb most will use is that if either of the above is roughly 3% or more of your gross annual salary, you may need to make some changes.

How Form W4 Works
Form W4 is used to tell your payroll department how much you would like taken out of your pay for Federal Income Taxes