The IRS has released their updated Withholding Calculator and an updated 2018 Form W-4 to reflect the tax reform bill passed December 22nd. All employees are encouraged to use the calculator and if necessary submit an updated Form W-4 to their employer as soon as possible.
IRS Withholding Links
To use the calculator, you will need your most recent paystubs. If you have already filed your tax return this year, a copy of your Form 1040 for 2017 will be helpful.
The IRS notes that while the calculator should give accurate results for most taxpayers, those with more complicated tax situations will need to use the instructions in Publication 505: Tax Withholding and Estimated Tax. This includes taxpayers who are subject to the alternative minimum tax, who have long-term capital gains or qualified dividends, or who owe self-employment tax, the tax on unearned income of dependents or certain other taxes. Publication 505 is not yet updated for 2018 and is expected to be completed in early spring.
Because we are already two months in to 2018 and new withholding tables have been in use for several weeks, the calculations produced for 2018 withholding may not be correct for 2019. All employees are encouraged to calculate their withholding again in early January 2019.
If you have questions regarding your specific situation or need an appointment to review your withholding or tax planning, call our office at 860-216-2195.