If you’ve been unpleasantly surprised by a change in the amount of your federal taxes, you can better plan for next year.
“When you got the job that you’ve got now, you did a W-4 form,” said Michael Devine with the IRS. “That tells your boss how much money to withhold from your paycheck every week or two weeks or every month. There are tables that go with that. Depending on what that W-4 says, depends how much comes out of your paycheck. Last year, there were big changes to the tax law. When you’re doing your taxes this year, you may get surprised if you didn’t adjust your withholding.”
It’s important to give yourself as much of the year to withhold additional money as you need.
“It’s really simple,” said Devine. “If you want to have an extra $1000 taken out of your paycheck to go towards taxes, the sooner you make that start happening, the smaller amount it’s going to be every paycheck.”
To find out what you need to have withheld, use the withholding calculator at IRS.gov.
“It’s simple to do,” said Devine. “I can tell you that, last year, I went back and checked, when did I update my W-4? When I got hired 14 years ago. It’s one of those things. It’s easy to forget. If you haven’t done a new W-4, or at least done a paycheck checkup you really need to do that, so that you know your taxes being withheld are what you want them to be.”
When you’ve used the calculator, you’ll need to inform your payroll representative of any changes you want made.