The Internal Revenue Service has released the updated Withholding Calculator on the IRS.gov site. The Withholding Calculator is designed to help taxpayers check their 2018 tax withholding under the new tax reform laws. They also released the updated 2018 W-4 form so that employees can make changes when necessary. Form W-4
The new tax laws effective for 2018 made changes including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets.
These changes mean it is especially important to do a “paycheck check-up” this year to make sure you are withholding properly and are not hit with an unexpected big tax bill or penalties in 2019 for under withholding.
“Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they are having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter.
“Withholding issues can be complicated, and the calculator is designed to help employees make changes based on their personal financial situation,” Kautter said. “Taking a few minutes can help taxpayers ensure they don’t have too little–or too much–withheld from their paycheck.”