The IRS has urged two-income families and those working multiple jobs to complete a “paycheck checkup” using the Withholding Calculator to verify they are having the right amount of tax withheld from their paychecks. The Withholding Calculator could also help taxpayers navigate the complexities of multiple employer tax situations. The Service further stated that taxpayers who have more complex tax profiles, such as two incomes or multiple jobs, could be more vulnerable to being under-withheld or over-withheld following the passage of the Tax Cuts and Jobs Act. Further, the calculator would recommend an additional amount of tax withholding from each job for taxpayers at risk of being under-withheld. Taxpayers could enter these amounts on their respective Forms W-4, Employee’s Withholding Allowance Certificate.
Moreover, if the calculator results indicate a change in withholding amount, the employee should complete a new Form W-4 and submit it to his or her employer as soon as possible. The fewer withholding allowances an employee enters on the Form W-4, the higher his or her tax withholding will be. For more details about withholding, taxpayers may visit Tax Reform page on IRS.gov.
For further assistance with calculating your withholdings for 2018, contact the professionals at Larson & Company today.