Hey, employees, in light of the Tax Cuts & Job Act, there are many tax changes that have taken place (for more information, see this article). In particular, the changes to tax credits and deductions will have an impact on your taxes this year. Although you usually check your withholdings after events like a marriage or birth, the IRS is recommending that taxpayers check their withholdings now to make sure that we are not surprised by a tax debt payment in next year’s tax season.
As an employee, you can use the W-4 worksheet (this form has been updated to account for 2018 changes) and the IRS Withholdings calculator to review your withholdings and make sure that your are claiming the correct of amount of allowances or correctly estimating their taxes. For more advice on checking your W-4 review, visit the IRS site.
Remember that the new standard tax deduction levels are $12,000 for individuals, $18,000 for heads of household, and $24,000 for married couples filing jointly and surviving spouses. This means that if you have itemized deductions in previous years, you will want to ensure that you’re not now within a standard deduction limit. You must also remember that personal exemptions have been suspended until 2025. Revisit your allowances now and save yourself a headache later!
Need a Tax Consultant or CPA?
Withholdings can be hard to understand for many people, yet it can prevent numerous headaches for employees. Although you may not have checked your withholdings since you started your job, now is a great time to revisit those numbers and see if they are still working in your favor. If you need help, MBS Accountancy is here to help you with all of your tax or financial needs, answering your difficult questions and providing you with simple, yet comprehensive solutions to your issues.