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Mind Your Withholding
[/fusion_text][fusion_text]Citing the new tax bill passed last December, payroll departments have implemented new IRS withholding tables in order to attempt to match the average individual’s estimated tax liability for the calendar year 2018. In fact, if you are mindful of your personal cash inflows and outflows, you may have noticed an increase in your paycheck in the month of February.
Generally, I like paying less in taxes. However, it is important to note that my estimated withholding may not be an accurate depiction of my 2018 estimated liability. In order to get an idea if you are on track to receive a tax refund or to write a big check to the Treasury, the IRS has put together a withholding calculator on its website.
I will be frank. The IRS doesn’t put in the time (or money) to make this calculator very pretty, but the results can allow us to get an idea of what we will actually owe in federal taxes.
In my specific situation, the tax cut is not really a cut at all. So it’s important for me to change my withholding (filling out a new W-4 form) or prepare to write a check come April, 2019.
In the first year of the new tax bill, tax planning can be even more important to set expectations and to make both tax-effective and tax-efficient decisions going forward. Although many of us are more occupied with the 2017 tax return filing, the earlier we can get a handle on our 2018 tax situation, the better![/fusion_text][separator style_type=”single” top_margin=”” bottom_margin=”” sep_color=”” icon=”” width=”” class=”” id=””][fusion_text]
Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. ASA gathers its data from sources it considers reliable. However, ASA makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.