Wait, don't just stuff a copy of your 1040 in your files now that April 15 is over. You may want to sit down right now and do a paycheck checkup.
Seriously. Did you suddenly owe $3,000 when you typically expected a tax refund? Did you get much smaller refund than usual when you filed your 2018 tax return?
A lot could be out of whack when it comes to how much money you're withholding in payroll taxes. Some people are just fine; some clearly aren't.
Next year, it's possible it could be worse for some taxpayers. Why? The new withholding table was in place for roughly nine months in 2018. This year, you could be going an entire year with having too little taxes being withheld _ unless you take action.
"The impact of the withholding changes will be amplified in 2019 because they will be in effect all 12 months of the year," according to H&R Block.
It's impossible to generalize this tax season about the state of America's returns. But if you owed far more than you expected, you would want to take notice now.
Take-home pay went up in 2018 once withholding tables were adjusted to reflect the lower tax rates in the Tax Cuts and Jobs Act of 2017.
But in many cases, there was a mismatch because the tax rules changed so much and withholding tables don't reflect all the details of your financial life that influence your actual tax bill.
Two common trouble spots:
_Two wage earners: The IRS notes that each job is withheld starting at the lowest tax rate. But if a married couple is filing a joint return, their actual tax is calculated on their combined income. And that often puts a married couple filing a joint return in a higher tax bracket.
_Itemizers: Your old withholding allowances might no longer really reflect what you're able to itemize under the new tax rules.
For some tax filers, the extra money that ended up in their paychecks turned out to be more than the amount their taxes would have gone down under the Tax Cuts and Jobs Act, according to H&R Block data.
Under the new tax rules, some people lost key tax benefits. Maybe your children are 17 or older and you don't get as big of a tax break. Maybe you now can only deduct up to $10,000 _ and no more _ for the money paid for state income taxes, local taxes and property taxes.
It was estimated, for example, that more than 10 million taxpayers could have been affected by the new $10,000 limit on deductions for individuals for state and local taxes.
It's a balancing act.
There's a way to fix all that. It's called tinkering with your W-4 to change how much money you're having withheld for taxes from your paycheck. Here's how to take action.
