IRS Reminds taxpayers to check withholding and submit new W-4 with employer
The IRS reminds taxpayers to look into whether they need to adjust their paycheck withholding. Taxpayers who do need to adjust their withholding should submit a new Form W-4, Employee’s Withholding Allowance Certificate to their employers. Taxpayers can use the updated Withholding Calculator on IRS.gov to do a quick “paycheck checkup” to check that they’re not having too little or too much tax withheld at work.
Among the groups who should check their withholding are:
- Two-income families
- People working two or more jobs or who only work for part of the year
- People with children who claim credits such as the child tax credit
- People with other dependents who can’t be claimed for the child tax credit, including children age 17 or older
- People who itemized deductions on their 2017 tax return
- People with high incomes and more complex tax returns
- People with large tax refunds or large tax bills for 2017
Here are a few things for taxpayers to remember about updating Form W-4:
- The Withholding Calculator will help determine if they should complete a new Form W-4.
- The calculator will help users determine the information to put on a new Form W-4.
- Taxpayers who use the calculator to check their withholding will save time because they don’t need to complete the Form W-4 worksheets. The calculator does the worksheet calculations.
- Taxpayers who complete new Form W-4s should submit it to their employers as soon as possible. With withholding occurring throughout the year, it’s better to take this step sooner, rather than later.
As a general rule, the fewer withholding allowances a taxpayer enters on Form W-4, the higher their tax withholding. Entering “0” or “1” on line 5 of the W-4 instructs an employer to withhold more tax. Entering a larger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty.
Employees who have too little withheld are not paying enough taxes throughout the year, and they may face an unexpected tax bill or penalty when they file next year. People who have too much tax withheld will get less money in their regular paycheck. If those taxpayers change their withholding and enter more allowances on Form W-4, they’ll get more money in their paychecks throughout the year.
Having a completed 2017 tax return and their most recent pay stub can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year.
Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state’s department of revenue to learn more.
Source: IRS | 2018 © Copyright Payroll Masters
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