Paycheck Checkup

The Tax Cuts and Jobs Act changed the way tax is calculated. The IRS encourages everyone to perform a “paycheck checkup” to see if you have the right amount of tax withheld for your personal situation.

Among the groups who should check their withholding are:

• Two-income families.
• People working two or more jobs or who only work for part of the year.
• People with children who claim credits such as the Child Tax Credit.
• People with older dependents, including children age 17 or older.
• People who itemized deductions in 2017.
• People with high incomes and more complex tax returns.
• People with large tax refunds or large tax bills for 2017.

The new tax law could affect how much tax someone should have their employer withhold from their paycheck. To help with this, the IRS urged taxpayers to visit the Withholding Calculator on IRS.gov. The Withholding Calculator can help prevent employees from having too little or too much tax withheld from their paycheck. Having too little tax withheld can mean an unexpected tax bill or potentially a penalty at tax time in 2019. And with the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.

If you find you need to change your withholding, you should complete a new Form W-4, Employee's Withholding Allowance Certificate. Submit the completed Form to your employer as soon as possible. Withholding takes place throughout the year, so it’s better to take this step as soon as possible.

If you have additional questions about your withholding, give us a call.