Taxpayers ‘paycheck checkup’ focuses on withholding

The Internal Revenue Service is encouraging taxpayers to do a “paycheck checkup” to make sure they have the right amount of tax taken out of their paychecks for their personal situation.

To help taxpayers understand the implications of the Tax Cuts and Jobs Act, the IRS unveiled several new features to help people navigate the issues affecting withholding in their paychecks.

The effort includes a new series of plain language Tax Tips, a YouTube video series and other special efforts to help people understand the importance of checking their withholding as soon as possible.

“The IRS is taking special steps to help taxpayers understand these tax law changes,” acting IRS Commissioner David Kautter said. “We encourage people to do a paycheck checkup to help make sure they’re having the right amount of tax withheld for their unique personal situation. To help with this, the IRS has added and updated a variety of tools and information to help taxpayers.”

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.

Taxpayers can use the Withholding Calculator to estimate their 2018 income tax. The Withholding Calculator compares that estimate to the taxpayer’s current tax withholding and can help them decide if they need to change their withholding with their employer. When using the calculator, it’s helpful to have a completed 2017 tax return available.

Taxpayers who need to adjust their withholding will need to submit a new Form W-4, Employee’s Withholding Allowance Certificate, to their employer, the IRS said.

“If an employee needs to adjust their withholding, doing so as quickly as possible means there’s more time for tax withholding to take place evenly during the rest of the year,” the IRS said in a statement. “But waiting until later in the year means there are fewer pay periods to make the tax changes – which could have a bigger impact on each paycheck.”

The IRS said that it always recommends employees check their withholding at the beginning of each year or when their personal circumstances change to make sure they’re having the right amount of tax withheld from their paychecks.

“With the new tax law changes, it’s especially important for certain people to use the Withholding Calculator on IRS.gov to make sure they have the right amount of withholding,” it said.

“The IRS always recommends employees check their withholding at the beginning of each year or when their personal circumstances change to make sure they’re having the right amount of tax withheld from their paychecks.”

Read more about this on pvtimes.com

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