This may be important to you, howard,
Your correct amount of payroll withholding
tax has probably changed as a result of
more than four dozen tax deduction changes
that came into law this year.
Under-withholding and over-withholding
are both bad ideas.
As hard as it may be to believe, the IRS
has actually done something good for us.
The IRS now has an online “withholding
calculator” which is surprisingly easy to
use – https://go.usa.gov/xPQd8
Results from the calculator will tell you if
it is a good idea, for you specifically, to
consider submitting a new, revised Form
W-4 (“Employee’s Withholding Allowance
Certificate”).
BUT FIRST, GET READY
Before going to the online calculator, you
will want to have a copy of your most recent
pay stub and tax return handy, and you will
need other information as well
Questions you will need to be ready to answer:
– Filing status (Single, Married filing jointly
or Married filing Separately)
– Can anyone claim you as a dependent?
– Total number of jobs held during the year.
– Contributions to a tax-deferred retirement,
Cafeteria plan or another pre-tax plan
– Scholarships or fellowship grants received
that are included in gross income.
– Number of dependents.
ALSO, you will be asked to input information
about Tax Credits you will be eligible for.
– Child and dependent care credit.
– Child tax credit.
– Earned income tax credit.
Then go to the online calculator at
https://go.usa.gov/xPQd8
First, you will enter your total estimated
taxable income expected during this year.
“Total taxable income” includes wages,
bonuses, military retirement, taxable
pensions, and unemployment compensation.
For any lines asking for amounts that
don’t apply to you, just enter “0.”
Then you’ll enter an estimate of adjustments
to income, including deductible IRA
contributions and education loan interest.
The calculator will ask whether you expect to
claim the Standard Deduction (which has
jumped to $12,000 for Singles or $24,000
for couples) or will Itemize your deductions
on a Schedule-A.
If you expect to itemize, you will enter
estimates of these deductions.
You can then print-out your results summary,
and the use those results to determine if you
need to complete a new W-4 and submit it
to your employer.
WARNING:
Don’t be misled by the title. The “2018 Tax
Cuts Act” contains some tax increases also,
not only tax cuts.
That’s why every taxpayer should use this
calculator. Even if you are used to getting a
refund every year, what if this year you end
up owing more taxes? That would NOT be a
pleasant surprise.
The cost to use the calculator is FREE, so
check it out now so you can protect yourself
from any end-of-year tax surprises.”
Creating Tax-Smart Small Business Owners
for TWO DECADES!
Ronald R. (‘Ron’) Mueller, MBA, Ph.D.
Author, Speaker & Small-Biz Tax Educator
P.S.
Do you know WHY your payroll withholding
tax may increase or decrease? It’s because
Congress has made 53 (!) changes to tax
deductions so far THIS YEAR! Some new,
positive deductions have been ADDED.
Some “old reliable” deductions have been
ELIMINATED. And a bunch of others have
been MODIFIED (some for us, some against us),
Get the whole story at CLICK HERE
