ALL TAXPAYERS SHOULD CHECK THEIR WITHHOLDING ASAP

IRS Tax Reform Tax Tip 2019-73, June 10, 2019

All taxpayers should check their withholding – also known as doing a Paycheck Checkup – as soon as possible. They should do a checkup even if they did one last year. By checking their withholding, taxpayers can make sure enough is being taken out of their paychecks or other income to cover the tax owed. Here are some things taxpayers should know about withholding and why checking it is important:

 

Taxpayers should check their withholding as early in the year as possible. If someone still has not done a Paycheck Checkup, there’s still time to get their withholding on track. They should do a checkup ASAP. Taxpayers should also check their withholding when life changes occur. These changes include things like:

 

Marriage or divorce

Birth or adoption of a child

Purchase of a home

Retirement

Chapter 11 bankruptcy

New job or loss of job 

 

Some taxable income is not subject to withholding. People with this income who also have income from a job may want to adjust the amount of tax their employer withholds from their paycheck. This includes income from things like:

 

Interest

Dividends

Capital gains

Self-employment and 

IRA distributions, including certain Roth IRAs

 

Some life changes might affect a taxpayer’s itemized deductions or tax credits. The taxpayer should check their withholding if they experience changes to their:

 

Medical expenses

Taxes

Interest expense

Gifts to charity

Dependent care expenses

Education credit

Child tax credit

Earned income tax credit

 

The best way for taxpayers to check their withholding is to use the Witholding Calculator on IRS.gov.

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Breunig CPA, LLC