The past month or so, you may have noticed a slight uptick in pay thanks to the recent tax cuts. As we’ve written previously, that means you’ll want to ensure your W-4 to make sure your employer is withholding the right amount from your paycheck. Now, that’s easier to do, because the IRS has released a new version of its withholding calculator.
Middle income earners will take home about $900 more this year compared to 2017, according to the Tax Policy Center. While your employer should have adjusted your withholding accordingly, it’s better to be safe than sorry. Because either you’ll owe money, which no one wants, or you could have more now.
Here’s the information you’ll need at hand to use the calculator:
- Your income (and your spouse’s)
- Your latest pay stub
- How much you’re contributing to a tax-deferred retirement account, like a 401(k)
- How much you’re contributing to pre-tax plans like health savings accounts, flexible spending accounts, long-term and short-term disability coverage, etc.
- Your most recent tax return
- Documents related to other sources of income, if you have any
Then just answer the calculator’s questions, and it will tell you how your W-4 should be filled in. Update that info with your human resources department, and you’ll be all set.