As tax law changes the IRS encourages taxpayers to verify if adjusting their paycheck withholding and resubmitting a new W-4 to their employer. A good source to use is the Withholding Calculator to do a quick “paycheck checkup” to see if too little or too much tax is withheld from your paycheck.
If you use the calculator and find out that your withholding's need to change, you can fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Make sure to submit the completed Form W-4 to your employer.
Here are a few things for you to remember about updating your Form W-4:
Taxpayers who use the calculator to check their withholding will save time because you don’t need to complete A NEW Form W-4. The calculator does the worksheet calculations for you!
You should always submit the new W-4 as soon as possible.
The calculator will provide you the information to put on your new Form W-4.
The Withholding Calculator will help determine if you should complete a new Form W-4.
The fewer withholding allowances you claim on Form W-4, the higher their tax withholding. Entering “0” or “1” on line 5 of the W-4 is the line that instructs employers to withhold more tax. Entering a larger number means less tax withholding, which means a smaller tax refund.
Individuals who have too much tax withheld will get less money on their paycheck. If your withholding's are changed and you enter more allowances on Form W-4: you will receive more money in their paychecks throughout the year. If you have too little withheld aren’t paying enough taxes and can result in an unexpected tax bill or penalty when they file the following year.
The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help you work with the Withholding Calculator to estimate the proper withholding for next year and avoid those issues.
Meet with a tax professional.
Contact LR Tax & Accounting to set up an appointment if you have concerns regarding your Tax needs. We can prepare your taxes and advise on filing for the following as well as the current year. We also offer tax resolution services if you find yourself facing the IRS collections process and the related penalties and consequences