Tax Alert: The IRS Releases Updated Withholding Calculator to Account for New Tax Changes
The IRS has recently released a Withholding Calculator designed to identify how many withholding allowances you should claim in 2018. This tool takes the new tax law changes into account and is valuable in determining your appropriate tax withholding now that the tax changes are in place.
According to the IRS, there are important reasons to check your withholding:
- It helps to protect against having too little tax withheld, creating an unexpected tax bill next year.
- With the average refund topping $2,800, you may prefer less tax withheld upfront and receive more in your paycheck.
In addition, the IRS encourages employees to file a new Form W-4 with their employer, especially those more likely to have a change in their tax situation this year (i.e.: those who itemized in 2017, have two-wage earners in the family, have two or more jobs, work for part of the year, etc.). It is helpful to use the results from the Withholding Calculator to help fill out the new W-4 Form and adjust your income tax withholding.
The advisors at Sax LLP will be sure to keep you updated on information regarding the new tax law changes as they emerge. For more information on the IRS’s Withholding Calculator, visit the IRS’s FAQ page or contact a Sax advisor for appropriate guidance.