Updated: Feb 13
Do you have a multi-income household? (Two partners both working? One or more members have multiple jobs?) Well, this Tax Tip is for you!
You may be wondering, with the new Trump Tax Law, are you having enough withheld or are you having too much withheld?
The new tax act, officially known as the “Tax Cuts and Jobs Act,” changed several things on the Federal Individual Income Tax Return, starting with 2018, that might affect your tax outcome at the end of the year.
The Standard Deduction increased…almost doubled in most cases. The personal exemption deduction ($4,100 per person) was eliminated. Child Tax Credit was increased by $1,000 per child under 17 years old. There is a new $300 credit for each non-child dependent (17 years or older) or parent for five years. Miscellaneous Itemized Deductions (which include unreimbursed employee business expenses) was eliminated. No more Moving Expense. Different Tax Rates and Brackets.
This is enough to confuse even many tax preparers, so how is the normal working person supposed to be able to figure out how much to withhold?
Good News! It’s even from the IRS of all things! On the web, go to the following address … https://www.irs.gov/individuals/irs-withholding-calculator
There is a link near the bottom of the page, just click “Withholding Calculator” and follow the instructions, provide information it requests, and voila! You will get a fairly accurate estimate of your 2018 tax liability. It will tell you what to put on your W-4 (number of allowances and marital status). I suggest you printout that last page, it has the instructions for what to change your W-4s to as well as a recap of the information you provided.
At the point, you can file new W-4s with all related employers. And, you’re done! Simple. It should help you sleep better at night.
Did you hear? Romans 13:7a says, “Pay to all what is owed to them: taxes to whom taxes are owed…”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.