Common mistakes when estimating overtime

These are the most common reasons an “estimate” feels wrong — and how to sanity-check without relying on state tax-rate assumptions.

Mistake: mixing overtime hours with regular wages

Overtime calculations depend on how overtime earnings are defined in payroll. If you’re unsure, confirm your overtime line items on a pay stub and check your employer’s payroll policy.

Mistake: leaving MAGI blank when household income is complex

If multiple jobs, spouse income, bonuses, or irregular overtime apply, a simple scenario may not approximate annual income well. In those cases, use official IRS tools to validate withholding assumptions.

Mistake: expecting paycheck withholding to match an annual estimate

Paycheck withholding is not the same as your annual tax return result. If you’re planning based on an estimate, verify with the IRS estimator and W‑4 guidance.

Mistake: assuming your state follows federal changes automatically

States can conform or decouple. Use the official state tax pointers on your state page to verify residency/withholding guidance and any conformity notes.

Official tools: IRS estimator and W‑4.