Now that a few months have passed since the Tax Cuts and Jobs Act went into effect, it might be a good time to give the recommended “paycheck checkup.” The changes could affect your tax withholding and having too much or too little taken out could have a big impact on your 2018 income taxes. This is especially unpleasant if you discover they did not withhold enough, resulting in unpaid taxes and penalties.
Let’s not take a chance on that surprise. The IRS is encouraging everyone to conduct a “paycheck checkup” to make sure your paycheck is healthy—not too fat and not too anemic. And they’ve developed tools like this withholding calculator to help you determine how much should be taken out.
But before you start clicking away, you’ll need to take a few minutes to prepare. Have recent pay stubs and last year’s tax return on hand to help with the 2018 estimates—the results you get from using the Calculator will only be as accurate as the information you plug into it.
If your circumstances change at any time of the year, say you get a raise, start a new job, or you get married or divorced, have a baby or your baby is no longer a dependent, come back to the Calculator to ensure your situation is still copacetic. And in this day and age of online privacy concerns, fear not. The IRS does not ask for any personal information such as your name, Social Security number or bank account numbers when you make use of the Calculator.
Do you need a Paycheck Checkup?
In one word, yes. All employees should do a checkup at the beginning of the year or when personal circumstances change. If you fall into one of the groups listed below, it’s wise to see where you stand:
- Two-income families.
- People working two or more jobs or who only work for part of the year.
- People with children who claim credits such as the Child Tax Credit.
- People with older dependents, including children age 17 or older.
- People who itemized deductions in 2017.
- People with high incomes and more complex tax returns.
- People with large tax refunds or large tax bills for 2017.
Don’t be caught off guard when it comes to your tax withholdings. Do a Paycheck Checkup. Nobody like surprises from the IRS. Journey provides multiple calculators that will also help you when making your own calculations for your paycheck. You can find all of Journey Calculators here: https://journeypayroll.com/calculators.