Friday, February 3, 2023

IRS Encouraging ‘Paycheck Checkup’ to Prevent Tax-Time Surprise

The Internal Revenue Service (IRS) is encouraging everyone to check their withholding to avoid an unexpected tax bill or penalty at tax time.

The new tax law adopted in December 2017 could affect how much tax employees should have their employer withhold from their paycheck.

The IRS said it is especially important to check withholding now for taxpayers who:

• Are a two-income family;

• Have two or more jobs at the same time;

• Work a seasonal job or work only part of the year;

• Claim credits like the child tax credit;

• Have dependents age 17 or older;

• Itemized deductions on 2017 returns;

• Have high income or a complex tax return;

• Had a large tax refund or tax bill for 2017.

Withholding Calculator

Taxpayers can use the IRS Withholding Calculator to estimate their 2018 income tax. The calculator compares the estimate to the taxpayers’ current tax withholding and can help them decide if they need to change their withholding. When using the calculator, it is helpful to have a recent pay stub and completed 2017 tax return available.

To use the calculator, visit www.irs.gov/withholding. If the calculator shows a change to withholding, the taxpayer will need to complete a new Form W-4.

In addition to the revised Withholding Calculator, the IRS has launched a series of Tax Reform Tax Tips, a Tax Tips email subscription program and YouTube videos to walk taxpayers through what they need to know about the new tax laws and how to fill out the appropriate forms.

More information is available under the Tax Reform button at the IRS website, www.irs.gov.

CalChamber
CalChamber
The California Chamber of Commerce is the largest, broad-based business advocate to government in California, working at the state and federal levels to influence government actions affecting all California business. As a not-for-profit, we leverage our front-line knowledge of laws and regulations to provide affordable and easy-to-use compliance products and services.

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