It's a good idea for anyone who received more than a $500 refund or owed more than 10% of their total tax bill to adjust withholding. For most taxpayers, it all comes down to the number of allowances claimed on the W-4. That's the form on file with your employer that helps determine the amount of tax withheld from your paychecks.

Most people fill it out when they first take a job and don't ever see or think about it again. But you can change the number of allowances at any time. The more allowances you claim, the less is withheld.

Some taxpayers, especially two-income couples, may find that they're underwithholding even though they're claiming zero allowances. The IRS solves this problem with a line on the W-4 that lets you tell your employer how much more to take out of your paycheck.

Step 1: See what's changed

Anything that lowers your tax bill -- exemptions, tax credits, deductions and losses -- can be considered in your allowance calculation.

Did you get married, divorced or have a child? Did you purchase a new home, refinance or take out a home equity loan? Did your portfolio tank, leaving you with big capital losses? Did you get a raise or earn less this year than last?

Step 2: Log onto IRS.gov

The easiest way to check your withholding is by using the IRS Withholding Calculator. This step-by-step wizard walks you through the calculation.

You answer a few questions and plug in the withholding amounts from your most recent pay stubs and your most recent tax return. The calculator estimates your tax bill, how far over or under that figure your withholding will be, and recommends how many allowances you should claim.

The calculator does not account for investment losses, however. If you have $3,000 or more of net losses, you can claim an extra withholding allowance.

If you prefer to evaluate your W-4 the old fashioned way, download IRS Publication 919, How Do I Adjust My Tax Withholding? It contains all the worksheets and instructions you will need to work through the calculations on your own.

Step 3: Print out and turn in your updated W-4

Once you calculate the your allowances, download a new W-4, fill it out and turn it in to your human resources office.

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