IRS Urges Paycheck Checkup
The Internal Revenue Service has issued a statement urging two-income families and those who work multiple jobs to complete a “paycheck checkup” to verify you have enough tax withheld from your paychecks.
The IRS Withholding Estimator can help determine the correct amount of tax that each of your employers should withhold.
The passage of the Tax Cuts and Jobs Act, which will affect 2018 tax returns that you file in 2019, makes verifying that you have the correct withholding amounts even more important. These tax law changes include:
- Increased standard deduction
- Eliminated personal exemptions
- Increased Child Tax Credit
- Certain limited or discontinued itemized deductions
- Changes in tax rates and brackets
If you need to adjust your paycheck withholding amount, doing so as soon as possible allows for more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to make the withholding changes – which could have a bigger effect on each paycheck, or potentially leave you under-withheld for 2018.
To use the Withholding Calculator, taxpayers should have their 2017 tax returns and most recent paystubs available.
If you need to complete a new Form W-4, submit it to your employer as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances they claim must submit a new Form W-4 with the corrected withholding allowances to their employer within 10 days of the change.