Editor's note: This is the fourth installment of New Year, New You, a weeklong look at your financial health headed into 2026.
You get your W-2 in January and realize you either owe thousands in taxes or get a massive refund. Both mean your withholding was wrong all year.
Most service members set their tax withholding once during in-processing and never look at it again. Life changes. You get married, have kids, buy a house or pick up a second job. Your tax situation changes, but your withholding stays the same.
Adjusting your withholding takes five minutes and can save you from owing the IRS or giving the government an interest-free loan all year.
Use the IRS Tax Withholding Estimator First
Before changing anything, run your numbers through the IRS Tax Withholding Estimator at www.irs.gov/individuals/tax-withholding-estimator. The calculator asks about your filing status, income, current withholding, deductions and credits. It tells you whether you need to adjust.
The calculator considers multiple jobs, spouse income and other factors that affect your tax bill. Running it takes about 10 minutes and prevents you from withholding too much or too little.
Read More: The Cost of Skipping Sick Call: How Active-Duty Service Members Can Protect Future VA Claims
Changing Withholding in myPay (Most Services)
Army, Navy, Air Force, Space Force and Marine Corps members use myPay at mypay.dfas.mil. Log in and click Federal Withholding. Click the yellow pencil icon to edit.
The page lets you enter information about multiple jobs, change dependents, add additional income, make deductions or withhold extra tax. You can see when the changes take effect on the blue bar at the top of the page.
Changes typically show up on your next pay statement. If you make changes early in the month, they might appear on your mid-month paycheck. If you make them later, expect them on the end-of-month check.
State tax withholding works differently. DFAS can only withhold for states with signed agreements. Changes require submitting DD Form 2866 through myPay or by mail. Not all states allow DFAS to withhold state tax.
Changing Withholding in Direct Access (Coast Guard)
Coast Guard members use Direct Access at hcm.direct-access.uscg.mil. The system processes changes the same way as myPay. Log in, navigate to tax withholding and update your information.
Coast Guard members can also submit written requests using IRS Form W-4. Mail completed forms to the Pay and Personnel Center in Topeka, Kansas, or submit them through your Personnel and Administration office.
Read More: Here’s Why January Is the Best Time to File Your VA Disability Claim
When to Adjust Withholding
Check your withholding when major life events happen. Marriage or divorce changes your filing status. Having kids adds dependents. Buying a house affects deductions. A spouse starting or stopping work changes household income.
Military-specific events matter, too. Deploying to a combat zone makes some pay tax-free. PCS moves change state tax situations. Separation from service means losing military income but potentially gaining civilian income.
Check at the start of each year, even if your circumstances seemingly stayed the same. Tax laws change. Brackets adjust for inflation. Your situation might be different even if it seems the same.
The Balance
Withholding too little means owing taxes in April plus potential penalties. Withholding too much means getting a refund but losing access to that money all year.
Some people like big refunds and treat it like forced savings. Others would rather have the money in each paycheck to pay bills, invest or set aside in normal savings.
Neither approach is wrong. What matters is that your withholding matches your tax situation and your preference for how you receive your money.
Run the estimator. Adjust your withholding. Check it annually. This simple process prevents tax surprises.
Previously In This series:
Part 1: 2026 Guide to Pay and Allowances for Military Service Members, Veterans and Retirees
Part 2: Understanding All the Deductions on Your 2026 Military Leave and Earnings Statements
Part 3: Should You Let the Military Set Aside Allotments from Your Pay?
Part 4: This Is the Best Thing to Do With Your 2026 Military Pay Raise
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