Here’s an easy weekend financial task for you: Update your tax withholdings.
Because of the new-ish tax law, tax brackets and rates are different than they were last year, and the standard deduction has doubled. That means your take-home pay is likely different (even if you didn’t receive a raise) and you may need to contact your payroll department.
You may be thinking, hey, this sounds familiar, have you written about this a few different times already? And the answer is yes, I have. But around 30 million people aren’t withholding enough, according to the Government Accountability Office, which means they’ll owe money to the IRS in April, and so this must be addressed again. On the other hand, around 75 percent of taxpayers are withholding too much, so they can look forward to a nice refund next year (or, change their withholding and get their money now).
Do you want a surprise tax bill in April? No? Then consider this a PSA: Update your W-4. (CNBC notes that people who claimed deductions in past years should especially make some new calculations, as the standard deduction has doubled and may be more appealing now.) The IRS released a new withholding calculator after the Tax Cuts and Jobs Act passed to help you out.