IRS urges taxpayers to check withholding to avoid tax surprises

Vermont Small Business Administration The IRS encourages everyone to use the Withholding Calculator, apps.irs.gov/app/withholdingcalculator/, to perform a quick “paycheck checkup.” This is even more important this year because of recent changes to the tax law for 2018. The Calculator helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work.

There are several reasons to check your withholding:

Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.

At the same time, with the average refund topping $2,800, you may prefer to have less tax withheld up front and receive more in your paychecks.

If you are an employee, the Withholding Calculator helps you determine whether you need to give your employer a new Form W-4, Employee's Withholding Allowance Certificate.

You can use your results from the Calculator to help fill out the form and adjust your income tax withholding. If you receive pension income, you can use the results from the calculator to complete a Form W-4P and give it to your payer.

For more information, visithttps://www.irs.gov/individuals/irs-withholding-calculator.

Source: Vermont SBA