Adjust the Withholding Amount Now Because Next Year’s Tax Refunds May Be Late
If you usually get a lot of tax refunds, it might be time to fix that. The IRS announced that the 2016 tax refunds might be a little overdue and called on taxpayers to adjust the amount of withholding .
We told you before that tax refunds are not as cool as you think – they just mean that you pay too many taxes throughout the year. And now the IRS has issued a fair warning: The money you get back in 2017 will probably take time, so you can adjust the withholding right now. In other words, stop paying taxes for a year.
Tax authorities still recommend doing this. Ideally, you should compare the amount you pay in taxes over the year with the amount you really owe. This means that in April you will not receive a large refund, but it also means that your salaries will be higher throughout the year.
To adjust the retention, you will change the W4 that your employer has registered for you. If you usually get huge reimbursements, you will want to increase the number of benefits on your W4. We’ve shown you how to do this in more detail here .
But what about the IRS delay?
The new law requires them to withhold reimbursement for several weeks for “some of the earlier 2017 filing claimants for the Earned Income Tax Credit and the Child Tax Credit,” they said. They add that the IRS and state tax authorities intend to “escalate identity theft,” which means that some tax returns may be delayed for additional time.
“With these changes, it makes sense at many different levels to review your withholdings and plan for future taxes for the next tax season,” said IRS Commissioner John Koskinen. “It’s up to you if you want to withhold the extra money to get a larger tax refund, but you have options if you would rather get a smaller refund next year and more money on your home now.”
If you usually get big refunds, you might want to add this to your to-do list before April. To find out more, head over to their release at the link below.
IRS urges taxpayers to check their withholdings; New Factors Increase the Importance of Mid-Year Review I IRS.gov