Get Your Paycheck Checkup Now! As we wind down on the 2017 tax season, there’s another one gearing up. The many tax changes of the Tax Cuts and Jobs Act are affecting your taxes right now… and have been since January 1.
In fact, even if you haven’t changed your withholding – even if you got a refund for 2017 – you may end up owing more in 2018. Or, you may be paying too much. It’s worth the extra time to estimate how much tax you will owe in 2018 now, while you can still do something about it.
The IRS & Your Withholding
The IRS is trying to get the word out. They’ve launched a YouTube series. They are providing plain language Tax Tips via an email subscription service. They are using social media to spread the word using the #PaycheckCheckup hashtag.
To address your personal situation, the IRS even has a withholding calculator on their website. You should have your 2017 tax return ready to help provide the information they need.
Too Little or Too Much?
It is to your benefit to estimate your taxes as best you can and withhold that amount.
With too much tax withheld, you will be due a refund. But you could also have also taken advantage of those dollars now and throughout the year. The average refund is over $2,800 – that’s over $230 a month you could put into savings or use to pay bills. You’re missing out on the benefits and the interest on that money.
With too little tax withheld, you will owe the government when it’s time to do your tax return (or earlier, if you pay quarterly taxes). That can come as a shock and create an undue financial burden when you have to come up with that money quickly.
So What if you Aren’t Having Enough Tax Withheld?
There’s still enough time left this year to make changes to your withholding. This will eliminate or reduce next April’s tax bill.
You’ll need to turn in a revised W-4 to your employer.
Remember, it’s not just about future paychecks.
You’ll need to make up for the paychecks you’ve already paid too little tax on by requesting additional money to be withheld.
Add up what you’ve underpaid and divide it by the number of paychecks remaining (plus a little extra, if you like to pay it safe). This way, you won’t be writing a check (or at least, not a big one) to the IRS this time next year!
Who Needs a Paycheck Checkup?
While the IRS always recommends you do a paycheck checkup at the beginning of each year. When your circumstances change, it’s also a good idea to do it.
However, with the new changes to tax law, it’s especially important if any of the following applies to you:
- You are a two-income family
- You are working two or more jobs
- You only work for part of the year
- You the Child Tax Credit (or other credits)
- You have older dependents, including children age 17 and up
- You itemized deductions in 2017
- You have a high income and a complex tax return
- You had a large tax refund in 2017
- You had a large tax bill in 2017
As you can imagine, there are a lot of people who fall into one or more of these categories.
Don’t let your 2018 taxes sneak up on you!
Find out today if you need to make changes to your withholding.
At SFS Tax & Accounting, we are always happy to help our clients with any tax questions they may have. Give us a call at (772) 337-1040 or make an appointment now online.
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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting Services as well as the Enrolled Agent and Certified Tax Resolution Specialist for SFS Tax Problem Solutions.
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Now What? I Got A Tax Notice From The IRS. Help! Defining and deconstructing the scary and confusing letters that land in your mailbox. Jeff defines and deconstructs the scary and confusing letters in a fashion that mixes attention to detail with humor and an intricate clarification of what is what in the world of the IRS.
The book is available in paperback and ebook on https://Amazon.com
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For more on SFS Tax Problem Solutions, visit: http://sfstaxproblemsolutions.com/
For more on SFS Tax & Accounting Services, visit https://sfstaxacct.com/
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738 Colorado Avenue Stuart, FL 34994
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Phone: 772-337-1040
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https://www.linkedin.com/company/sfs-tax-problem-solutions/
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