Paycheck Withholding Calculator – Are You Withholding Enough Tax?

Do you know if you are withholding enough tax from your paycheck?

The IRS has released a new Paycheck Withholding Calculator to help taxpayers determine if they are currently withholding enough tax to avoid a hefty tax bill and penalties next year at tax time.

The calculator is a very easy and quick tool for taxpayers, especially those who:

• Are two-income families
• Work two or more jobs or who only work for part of the year
• Have children who claim credits such as the child tax credit
• Have other dependents who can’t be claimed for the child tax credit, including children age 17 or older
• Itemized deductions on their 2017 tax return
• Earn a high income and require more complex tax returns
• Received large tax refunds or large tax bills for 2017

The IRS is encouraging taxpayers to complete their "paycheck checkup" as early as possible.  They are also recommending that taxpayers who changed their withholding at the beginning of 2018, check their withholding again at the start of 2019, especially those who reduced it sometime during the current year.

If a withholding adjustment is necessary, an employee can complete a new Form W-4, Employee's Withholding Allowance Certificate, with their employer.

For more information on withholding, contact one of our tax professionals today.