Your paycheck may need a checkup! With the new tax law that passed in December 2017, there is a good chance that you will see some changes when you file your 2018 income tax return. In order to be prepared for the impact of the new tax law, it is a good idea to plan ahead. One way that you can plan ahead is to use the withholding calculator that the IRS provides on their website to make sure your withholding is appropriate for your tax situation.
The two main reasons you should check your withholding are:
- To help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
- The average refund is typically around $2,800 (per the IRS). Rather that waiting until next year for your refund, you may prefer to have less tax withheld up front and receive larger paychecks.
In order to use the withholding calculator, you should gather up some documents – remember, the results are only as accurate as the information you provide:
- Locate your most recent pay stubs.
- Have your most recent income tax return handy
Follow the link below to the IRS’s withholding calculator:
www.irs.gov/individuals/irs-withholding-calculator
If you have any questions or would like help in determining if your withholding is adequate, please contact us.