In case you haven't heard many of our tax laws changed for 2018. It seems like everyday there are a plethora of posts about some aspect of the new law that took effect January 1, 2018. You may have already noticed a change in your take home pay resulting from changes to the tax rate schedules. I recommend you do a Paycheck Checkup.
You may be having too much or too little tax withheld now that tax brackets and schedule rates have changed. Getting a surprise tax bill or maybe even a penalty is not something to look forward to. If your having too much withheld you may instead choose to increase your take home pay each pay period. Now is a great time to see where you stand before we get any closer to year end. It's better to make any adjustments sooner rather than later. If you are recently divorced doing a Paycheck Checkup is especially important and may provide you the opportunity for increased take home pay.
The updated IRS withholding calculator will help you decide if you need to complete a new Form 2018 W-4. Use the updated IRS withholding calculator results to help you complete the W-4 and make any withholding adjustments.
While the calculator works for most people, those with more complex tax issues should follow the instructions in IRS Publication 505. Please note the Publication 505 link is for 2017 as the IRS has yet to update it for 2018.
Doing a Paycheck Checkup is not a one time and done event. I recommend the checkup at the end of each year for the following year or anytime you have a change in income, employment, or family circumstances.
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