Time for A Paycheck Checkup!

         Federal income tax that is withheld from paychecks is generally paid over the year. The amounts withheld are shown on the Form W-2. That has not changed. However, this has been a big issue when filing 2018 Tax Returns because of how the Tax Cuts and Jobs Act (TCJA) changed Withholding Tables. That directly impacted the Tax Refund or debt responsibility given to Taxpayers.

          To avoid another surprise next year, the Internal Revenue Service (IRS) recommends a Paycheck Checkup as soon as possible. This should be done even if there are no significant changes from last year. This way, you can plan to get the refund you want next year. Withholding can be changed by filling out a Form W-4. The amount withheld depends on the amount of income earn, along with filing status (married or single), the number of allowances (the more claimed, the less withheld), and any other additional amount requested to be withheld.

          This evaluation should be done as early in the year as possible. When there are major life events such as marriage, divorce, home purchase, adoption or birth of a child, or bankruptcy, a Paycheck Checkup should be made to keep from being surprised by your next Tax filing. When making a change in your Form W-4, it will simply be given back to your employer, not the IRS. Understanding your Tax Withholding now, will make next Tax Season a lot easier.

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