To avoid penalty for underpayment of taxes the IRS is urging taxpayers to check their withholding and make estimated tax payments. According to the IRS nearly 10 million taxpayers faced a penalty for underpayment of estimated tax last year. The IRS has a Withholding Calculator to assist you in determining how much Federal Withholding to take out of your paycheck. Give your employer a new IRS Form W-4 or give us a call and we can help you out. Check out the link below.
The IRS encourages everyone to use the Withholding Calculator to perform a quick “paycheck checkup.” This is even more important this year because of recent changes to the tax law for 2018.
The Calculator helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work.
There are several reasons to check your withholding:
- Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
- At the same time, with the average refund topping $2,800, you may prefer to have less tax withheld up front and receive more in your paychecks.
If you are an employee, the Withholding Calculator helps you determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. You can use your results from the Calculator to help fill out the form and adjust your income tax withholding. If you receive pension income, you can use the results from the calculator to complete a Form W-4P and give it to your payer.