With more than half of the year over, it is a good idea to do a “Paycheck Checkup” to see if you are having the right amount of taxes withheld, especially with the upcoming major changes in the tax law.
The Tax Cuts and Jobs Act, passed in December 2017, with significant changes, which will affect 2018 tax returns that people file in 2019. Therefore a paycheck checkup is more important than ever. These tax law changes include:
Increased standard deduction
Eliminated personal exemptions
Increased Child Tax Credit
Limited or discontinued certain deductions
Changes in the tax rates and brackets
In order to have a preliminary look at how these changes will affect you, use the IRS Withholding Calculator and Publication 505, Tax Withholding and Estimated Tax.
A special word of caution for the following taxpayers, for whom a paycheck checkup is mostly advised:
Are a two-income family.
Have two or more jobs at the same time or only work part of the year.
Claim credits like the Child Tax Credit.
Have dependents age 17 or older.
Itemized deductions in 2017.
Have high income or a complex tax return.
Had a large tax refund or tax bill for 2017.
Please remember that LR Tax & Accounting Services, Inc. is always here to help with any questions and concerns. We offer tax planning, tax resolution, tax returns for individuals and business, accounting, payroll and bookkeeping. Please contact us today to get a quote or ask a question!