Q. My paycheck is never the same because I’m in sales. I’m always adjusting my W-4 to get the withholding right. Now my payroll department is telling me I have to wait a month before my changes are input. Is this legal?

A. As I say all the time in this blog, the W-4 is the employee’s best tax planning tool. If you get the right amount of withholding set, you will have neither a large refund or a large extra payment when you file your taxes. Unfortunately, that is the ideal situation that most people never see.

Per IRS Publication 15, “If an employee gives you a Form W-4 that replaces an existing Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date when you received the replacement Form W-4.” Many employers use this to reduce the burden of frequent changes to withholding information produced by employees. To answer your question, yes, it is entirely legal what your employer is doing.

Ultimately, it comes down to the fact that it is better to set your W-4 values with your tax adviser at the beginning of the year and revisit your withholding with that adviser around September or October. This also reduces the amount of processing required of your payroll department and keeps your tax management to a minimum amount of effort.