In light of the new tax law changes, the IRS is encouraging Taxpayers to perform a “Paycheck Checkup” via their new Withholding Calculator tool to ensure that the appropriate amount of taxes are being withheld from their paychecks.
Per acting IRS Commissioner David Kautter, “it’s important every year for people to review if they’re having the right amount of tax withheld from their paychecks… this year, it’s even more urgent for people to review their situation following the new tax law changes. As people complete their 2017 tax returns, this is a perfect time to take a paycheck checkup… The IRS urges people in these groups to take a few minutes and review their withholding and tax situation… taking this step will help avoid surprises next year at tax time.”
It is especially important that Taxpayers who meet the following criteria perform this “Paycheck Checkup”:
- Taxpayers in households with 2 or more jobs
- Taxpayers who work for only part of the year
- Taxpayers who have children or dependents (including older dependents such as children 17 or older)
- Taxpayers who itemize their tax-deductible expenses
- Taxpayers who have high incomes or complex tax situations
To perform a “Paycheck Checkup”, Taxpayers should visit https://www.irs.gov/payments/tax-withholding. If the Withholding Calculator reveals a need to adjust the amount of tax to be withheld, Taxpayers should then complete a Form W-4 Employee’s Withholding Allowance Certificate. Too little taxes withheld can create a tax bill, penalties, and interest. Too much withheld means a greater refund, but less money available to the Taxpayer paycheck-to-paycheck.
For more information, check out the IRS Newswire IR 2018-80 or watch their latest YouTube video - https://www.youtube.com/watch?v=eVSgIrNJ1MI. As always, Bryson Law Firm, LLC is here to help!