Tax Refund – or Payment – Not What You Were Expecting?
The Tax Cuts and Jobs Act of 2017 brought many changes to the tax law, including reduced tax rates, elimination of personal exemptions, increased standard deductions, increased child tax credits and changes to itemized deductions.
Because of these changes, the tax refund you’re accustomed to receiving may have been impacted – or maybe you had to pay. The good news is it’s only March, which means doing a paycheck checkup using the IRS’ Withholding Calculator now could alter your 2019 return – and help you avoid taking a hit.
A paycheck checkup is especially important if you:
- had a large tax refund or tax bill for 2018 when you filed their tax return this year.
- adjusted your tax withholding in the middle or later part of 2018.
- had a major life change this year.
- are a two-income family.
- have two or more jobs at the same time or only work part of the year.
- claim credits such as the Child Tax Credit.
- have dependents age 17 or older.
- itemized deductions in the past.
- have high income or a complex tax return.
Reviewing withholding is especially important if you did a checkup in 2018 and adjusted your withholding during the middle or late in the year. Another review now can help ensure you have the right amount withheld for the rest of 2019.
To use the calculator, you will need your most recent paycheck stubs and a copy of your most recent income tax return. The results will only be as accurate as the information provided, so if your circumstances change anytime during the year, you should revisit the calculator to ensure your withholding is still correct.
It will tell you if your withholding is short or if you are withholding too much, so if you need to adjust your withholding, instructions for changing your withholding is provided on the website.
The calculator does not ask you to provide sensitive personally identifiable information such as your name, Social Security Number, address or bank account numbers, nor does the IRS save or record the information you enter.
We will continue to share information regarding changes, clarifications and new guidance as it becomes available. In the meantime, please contact your Ericksen Krentel tax professional or email firstname.lastname@example.org if you have any questions or concerns about your withholdings.
About Ericksen Krentel
Ericksen Krentel CPAs and Consultants, founded in New Orleans, Louisiana in 1960 with offices in New Orleans and Mandeville, believes that serving as the clients’ most trusted adviser is grounded in going beyond the numbers.
That includes helping clients achieve their business and personal financial goals by providing innovative and exceptional services in the following areas: audit and assurance services, tax compliance and planning, outsourced CFO services and business valuations for a variety of industries; employee benefit plan audits; fraud and forensic accounting; business planning; IT consulting; wealth management; loss calculations; and estate planning.
Learn more at www.ericksenkrentel.com.