How to Upgrade Your W-4 Now That Tax Cuts Begins
In the past month or so, you may have noticed a slight increase in wages thanks to the recent tax cuts. As we wrote earlier , this means you will want to check if your employer is withholding the correct amount from your paycheck. This is now easier to do because the IRS has released a new version of its retention calculator .
According to the Center for Tax Policy, this year middle-income people will get home about $ 900 more than in 2017. While your employer should have adjusted the retention accordingly, it’s best to play it safe. Because either you will owe money that no one needs, or now you may have more.
Here is the information you need to use the calculator:
- Your income (and your spouse’s)
- Your last payment receipt
- How much do you deposit into a tax-deferred retirement account, such as 401 (k)
- How much do you contribute to pre-tax plans such as medical savings accounts, flexible expense accounts, long-term and short-term disability insurance, etc.
- Your last tax return
- Documents related to other sources of income, if you have
Then just answer the calculator’s questions and it will tell you how to complete your W-4. Update this information with your HR department and you’re done.