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With the new tax laws in effect for 2018 its a good idea to do a quick checkup on the amount of taxes you’re having withheld. The IRS has made with this simple to do with its new online Withholding Calculator. The Calculator helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work.
There are several reasons to check your withholding:
Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
At the same time, with the average refund topping $2,800, you may prefer to have less tax withheld up front and receive more in your paychecks.
If you are an employee, the Withholding Calculator helps you determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. You can use your results from the Calculator to help fill out the form and adjust your income tax withholding.
Tax payers with simple situations might not need to make any changes. Simple situations include singles and married couples with only one job, who have no dependents, and who have not claimed itemized deductions, adjustments to income, or tax credits.
People with more complicated financial situations might need to revise their W-4. With the new tax law changes, it’s especially important for these people to use the Withholding Calculator to make sure they have the right amount of withholding.
Among the groups who should check their withholding are:
• Two-income families.
• People with two or more jobs at the same time or who only work for part of the year.
• People with children who claim credits such as the Child Tax Credit.
• People who itemized deductions in 2017.
• People with high incomes and more complex tax returns.
As always, if you have any questions about your withholding or your tax situation in general, you should contact your tax professional. More information is also available in the special Withholding Calculator Frequently Asked Questions.