You may have noticed an increase in your take-home pay recently due to the Tax Cuts and Jobs Act passed by Congress in December. Now, you need to determine how that will affect you when it comes time to file taxes next year. The IRS has released a new withholding calculator to help you determine whether to change your withholding status on your W-4 to reflect these changes to the tax law.
Everyone is encouraged to check their withholding status, but it is particularly important for the following individuals:
• Two-income families.
• People with two or more jobs or who only work for part of the year.
• People with children who claim credits such as the Child Tax Credit.
• People who itemized deductions on their 2017 taxes.
• People with high incomes and more complex tax returns.
The calculator is available at www.irs.gov/ individuals/irs-withholdingcalculator. Before using the calculator, you need to have a few items readily available to help you answer the calculator’s questions. These items include:
• Your most recent pay stubs.
• A copy of your most recently tax return. Preferably, the 2017 tax return if you have already filed your taxes this year.
Depending on the results, you may want to update your Form W-4 with your employer to withhold more federal taxes from your paycheck. Updating your Form W-4 is not a requirement but a personal preference.
For more information on tax law changes, visit the IRS. gov or talk with your tax preparer. More information on family financial education is available at the Letcher County Extension office. Contact Nanette Banks 606-633-2362.