Review Your Withholding Now to Avoid Surprises at Tax Time
The recently enacted Tax Cuts and Jobs Act (TCJA) will result in lower 2018 tax bills for millions of Americans. In response to the newly lowered tax rates, the IRS has revised the federal income tax withholding tables for 2018. Thus, you may have noticed less federal income tax being withheld from your paycheck, retirement distributions, and/or social security benefits.
The new withholding tables are designed to give you more take home pay during the year, but by doing this, your anticipated tax refund may be totally eliminated. We have recently learned that many taxpayers may even have a balance due when they file their 2018 tax return next April. Taxpayers with multiple jobs may be more greatly impacted. We are especially concerned about our clients who have become accustomed to receiving a tax refund every year. We know our clients do not like these kinds of surprises and neither do we!
If you have federal income tax withholding, whether it be as a W-2 employee, or from retirement benefits such as IRA’s, pensions, and Social Security, we strongly encourage you to contact us so that we can evaluate your 2018 tax situation. There is still time to make withholding adjustments for 2018, but we must act quickly as we are already halfway through the year.
In order to perform the necessary calculations, we will ask that you provide us with copies of your most recent paystubs showing year-to-date payments and withholdings. We will also ask you about any changes to your family and/or tax filing status that may affect your tax situation. We will use the information you provide to project your 2018 tax liability and will provide you with an estimate of the amount of tax that you will either owe to the IRS or be due a refund when filing your tax return.
If you do not like the outcome of the tax projections and would like to have additional federal income tax withheld, we can also assist you with completing a new W-4 to give to your employer, W-4P to give to your pension administrator, or W-4V to give to the Social Security Administration. At Ketel Thorstenson, we are here to help you! Please contact us today at 605-342-5630 to discuss your individual tax needs.