Are You Withholding the Right Amount from Your Paycheck?

Are You Withholding the Right Amount from Your Paycheck?

The Tax Cuts and Jobs Act, passed in 2017, was the largest tax law overhaul in generations. 2018 tax filings bring the first glimpse into whether you’ve been withholding too much or too little from your paycheck.  

Most individual taxpayers can use the free IRS Tax Withholding Calculator that takes all the rule and law changes put into place and applies them to your personal information to perform what the IRS calls a “paycheck checkup.” The tool helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work. 

For employees or those receiving a pension, the calculator could determine whether you need a new Form W-4 or Form W-4P.  

  • Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.  
  • At the same time, with the average refund topping $2,800, you may prefer less tax withheld up front and receive more in your paychecks.  

Before using the calculator, make sure you have your most recent pay stubs, and a copy of your completed Form 1040. 

If you have additional questions about your withholding after using the calculator, consult your employer or tax advisor

Note: This Withholding Calculator works for most taxpayers. People with more complex tax situations should contact a tax advisor.