Employees typically fill out an IRS Form W-4 when they start a new job and then forget about it. The purpose is to let the employer know how much to withhold from the employee’s paycheck. However, you might want to revise your W-4.

Suppose John Smith starts a job when he is single. He only has one personal exemption on his tax return so he requests one “withholding allowance” on his W-4. With one allowance, a fairly large portion of his paycheck will be withheld for state and federal income tax.

A few years later, John is married with two children and a home mortgage. If he still claims one withholding allowance, he’ll be over-withheld and get a smaller paycheck, aftertax. It’s true that John eventually will get a refund for overpaid income tax but the IRS will have the use of John’s money in the meantime.

Similarly, John may be under-withheld if he claims four withholding allowances after his children are grown and his home mortgage is paid off. Then John might owe a sizable sum with his income tax return.

To avoid such problems, go over your W-4 whenever your financial situation changes substantially. Use the form’s worksheet to closely match your paycheck withholding to your eventual tax obligation.