ATLANTA - Some of you may have noticed a fatter paycheck in recent weeks. The recent Tax Cuts and Jobs Act changed the federal income tax rates and brackets. The Trump administration wants more money in your wallet for spending. But, there could be a change for some that will be an unwelcome surprise.
Listen, my check is bigger and I like that. I just had to put down money for summer camps and - guess what - that extra money came in handy. But, here's something that might trip you up. You might owe Uncle Sam next tax season. Instead of waiting for a potentially unwelcome surprise, you can figure this out now.
Let's do a paycheck check-up.
The IRS has a W-4 calculator. But honestly, I found it a bit hard to use. The more app-like versions on H&R Block and TurboTax were easier for me. I recommend though you try them all just to make sure you're seeing nearly the same number offered up. What these do is help you to figure out what the correct number of withholding allowances is right for you, not what the government just decided is right for you. Here are a couple of things that'll you need: your paystubs and 2017 tax return handy. You can't do this without these.
Now it'll help you predict for your 2018 return whether you will owe money or not. And if you don't like the new result, change it.
You change your withholding. You can find a W-4 form online with the IRS. Or go to your employer's HR or accounting office and try there. But here's a rule of thumb: The fewer withholding allowances you enter on your W-4 the more taxes taken from your paycheck - smaller check. If you want more in a paycheck, boost your withholding on your W-4. But, truly I recommend everyone do this so you don't get socked owing the IRS next year if you weren't planning on that.