How Much Should You Withhold? IRS Calculator Can Help
The IRS is joining the chorus of tax accountants warning people that their paycheck withholding and potential tax refund may not be what they expect next year.
The Government Accountability Office this month found that a slightly higher percentage of Americans are not having enough withheld in their paychecks every week because of uncertainty over the new tax laws.
The New Jersey Society of Certified Public Accountants also is urging people to review how much money is being withheld every week.
According to Internal Revenue Service spokeswoman Patricia Russomagno, the IRS normally recommends checking withholding once or twice a year, but now they’re suggesting everybody in New Jersey should take another look.
At the IRS.gov website, you can click on Do a Paycheck Checkup. You'll need your last paycheck stub and the year-to-date figures for your income.
Russomagno explained the Paycheck Checkup will give you a clearer idea of your financial picture and let you figure out whether you prefer a large refund next year or to receive more in your paycheck this year.
“We just want to make sure that people are not getting a surprise that they’re not expecting, either owing money or receiving a windfall of a refund that they just don’t want," she said.
She noted while everyone is being encouraged to do a Paycheck Checkup, some people may be more affected by the tax law changes than others.
“People who belong to a two-income family, people who work perhaps more than one job throughout the year or they work seasonally, those parents out there who are claiming the child tax credit, and those people who noticed in their 2017 taxes this past spring that they either received a very large refund or they owed money unexpectedly," Russomagno said.