Early this year, new tables for federal income tax withholding were released, reducing the amount being withheld throughout the year. This could lead to an unpleasant surprise when you complete your 2018 income tax return. You may not have enough tax paid when you file your income tax return.
The IRS has developed a calculator to help you double check your withholding and make sure you are not underpaid at the end of 2018. The link below will take you to the IRS Withholding Calculator. You will want to have a few documents ready to start the calculator. These include your most recent income tax return and a recent pay stub for you (and your spouse, if married). This information is not saved on the IRS website and you do not need to provide any sensitive information like bank account or social security numbers.
If you find that a change is needed, you can complete a Form W-4, also available on this page of the IRS website. You should then provide the revised W-4 to your employer as soon as possible.
If you need help evaluating your withholding, please contact our office and we will be happy to assist in reviewing your situation.
Treasury Circular 230 Disclosure
Unless expressly stated otherwise, any federal tax advice contained in this communication is not intended or written to be used, and cannot be used or relied upon, for the purpose of avoiding penalties under the Internal Revenue Code, or for promoting, marketing, or recommending any transaction or matter addressed herein.