The changes made to tax reform legislation that were enacted in December 2017 are having a significant impact on taxpayers today. For this reason, the Internal Revenue Service has strongly advised taxpayers to assess their 2019 tax withholding. The changes to this legislation included:
- lowered tax rates
- increased standard deductions
- suspension of personal exemptions
- the increased Child Tax Credit and limited or discontinued deductions
The IRS Withholding Calculator is a great tool that helps individuals identify their tax withholding to ensure the right amount of tax was being withheld from your paycheck. The IRS reccommends checking withholding at least once a year and to do a Paycheck Checkup if you:
- owed tax when you filed your tax return this year
- had a refund that was larger or smaller than expected
- had life changes such as marriage, childbirth, adoption, or buying a home
- had changes to your income
If you find that your withholding is too high or too low it may result in a significant change to your refund or tax bill next year. The solution to this problem is to adjust your withholding based on your Paycheck Checkup.
To change your withholding, employees will need to complete a Form W-4, Employee's Withholding Allowance Certificate, and submit it to your employer.
For the full release on Tax Withholding visit: https://www.irs.gov/newsroom/irs-reminder-get-tax-withholding-right-do-a-paycheck-checkup-at-least-once-every-year