Approximately one year ago the tax laws went through some significant changes. These changes, which went into effect in 2018, have a direct impact on the amount of federal taxes withheld from your paycheck.
The IRS encourages everyone to do a paycheck checkup to ensure you are having the proper amount withheld from your paycheck. There are still over two months left in this tax year, so you have time to adjust your withholdings if they are not where they should be.
Depending on your circumstances, this could help prevent you from having too much withheld from your paycheck, putting more money in your pocket. On the other hand, you may need to increase your withholdings to avoid an unexpected tax bill or penalty next spring.
Check out the new IRS Withholding Calculator on IRS.gov to see if you need to make any adjustments to your withholdings. You can use these results to fill out a new W-4 if the need arises. You can also get this form on IRS.gov. Once you have filled out this form, just give it to your employer – it’s that simple.
A paycheck checkup is a good thing for everyone to do, but especially if you fall into one of the following categories:
- There is more than one wage earner in your household.
- You have more than one job.
- You have itemized deductions.
- You have children.
No matter what, it’s always best to run a paycheck checkup sooner rather than later. The earlier it is done, the more time your withholdings can be adjusted evenly throughout the year to make up the difference before the end of the tax year.