The tax law new in 2018 overhauled the taxation system in the United States. Among other changes, the new law increased the standard deduction, removed personal exemptions, increased the Child Tax Credit, limited or discontinued certain deductions and changed the tax rates and brackets. As a result, your tax liability for 2018 may be substantially different than it was in past years. The IRS has strongly encouraged taxpayers to perform a “paycheck check-up” to see if they are withholding the right amount of taxes as a result of the changes to the tax law.
By performing a paycheck check-up, you can determine if you are underwithholding or overwithholding from your paycheck. If you are underwithholding, you may be surprised by an unexpected tax bill when you file your tax return for 2018 at tax time in 2019. IRS Trouble Solvers™ encourages all taxpayers to perform a paycheck check-up to determine if they are withholding at the proper level and to file a new Form W-4 with your employer, if necessary.
Certain types of taxpayers may be especially susceptible to changes in their withholding, including two income families, people who work two or more jobs, people that have children and claim credits such as the Child Tax Credit, people that have older dependents, people who itemize, people who earn high income or have complex tax returns and people who receive either large refunds or have large tax bills in 2017.
You can easily check whether you are withholding at the correct level by visiting the Withholding Calculator on the IRS.gov website. Do you have unpaid liability due to the IRS? Call us, we can help.