As you probably know, Congress passed the Tax Cuts and Jobs Act in December 2017, which the President signed and officially made law. While it will not affect your 2017 return, the changes to the tax law have the potential to create serious impacts on your 2018 return.
Due to the potential for significant changes to your tax return, it is important to review your current withholding. There is a good chance that your withholding will need to change following the new tax laws. If you are not careful, you could be stuck with a major tax bill when the time comes to file your 2018 return.
Luckily, calculating your updated withholding is relatively easy. The IRS provides an online calculator which will tell you the amount they recommend withholding. It is available at:
After reviewing your current situation, if you decide to make some changes, fill out a Form W-4 and submit it to your employer. Remember, the results from the withholding calculator will only be as accurate as the numbers you enter, so make sure the information you input is correct. Be certain of the changes you wish to make before submitting them to your employer. Form W-4 is available at:
Specifically, the IRS recommends that individuals who fall into one of these categories should be sure to review their withholding (from irs.gov):
● Two-income families.
● People with two or more jobs at the same time or who only work for part of the year.
● People with children who claim credits such as the Child Tax Credit.
● People who itemized deductions in 2017.
● People with high incomes and more complex tax returns.
Even if none of these categories apply to you, it is still prudent to double check your withholding. This year especially, we highly recommend doing some tax planning with us come summer/fall.