The Internal Revenue Service says it urges two-income families and those who work multiple jobs to complete a “paycheck checkup” to verify they are having the right amount of tax withheld from their paychecks.
The IRS Withholding Calculator at IRS.gov can help them navigate the complexities of multiple employer tax situations and determine the correct amount of tax for each of their employers to withhold.
The passage of the Tax Cuts and Jobs Act, which will affect 2018 tax returns that people file in 2019, makes checking withholding amounts even more important, the IRS said.
Among the tax law changes:increased standard deduction
eliminated personal exemptions
increased Child Tax Credit
limited or discontinued certain deductions
changed the tax rates and brackets
Individuals with more complex tax profiles, such as two incomes or multiple jobs, may be more vulnerable to being under-withheld or over-withheld following these major law changes.
The IRS encourages a “paycheck checkup” as early as possible to help taxpayers check if they are having the correct amount withheld for their personal financial situations.
If a taxpayer needs to adjust their paycheck withholding amount, doing so earlier gives more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to make the tax changes – which could have a bigger effect on each paycheck, the IRS said.
The tax law changes generally don’t affect 2017 returns that people are filing in 2018.
The changes affect 2018 returns, which taxpayers will file in 2019.