Your BBB® has learned that the Internal Revenue Service has recently released an updated version of their Withholding Calculator, and you can find it on irs.gov. Also, the newest version of Form W-4 is available online, in case you need it. “Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter. The Tax Cuts and Jobs Act has made a few significant changes to the tax law, such as: increasing the standard deduction, removing personal exemptions, increasing the child tax credit and many others.
“Withholding issues can be complicated, and the calculator is designed to help employees make changes based on their personal financial situation,” Kautter said. “Taking a few minutes can help taxpayers ensure they don’t have too little – or too much – withheld from their paycheck.” These changes will not affect your 2017 tax returns that are due this April, but keep this info in mind for next year!
According to the IRS, you can use the Withholding calculator to do a fast “paycheck checkup”. Also, the IRS has recently released the new withholding tables in January 2018. You can use them to calculate the exact amount of tax withholding, which means that if you don’t have a complicated situation, you may not need to make any changes. Complicated situations are singles and married couples with just one income, no dependents or itemized deductions. If your situation is a complicated one, make sure to review your W-4 one more time, as you may need to make some adjustments for next year.
The IRS recommends checking your withholding if you identify with one of these situations:
- Two-income families.
- Part-time employees or people who work more than one job simultaneously.
- Families who claim Child Tax Credit for their children.
- Individuals with itemized deductions in 2017.
- Individuals with high incomes or more complex tax returns.
For more information about the IRS Withholding Calculator, click here.