The changes to the tax code for 2018 still have a lot of people confused. While you don’t have to worry just yet about whether to take the standard deduction or not, there are some steps you can take to avoid paying too much (or not enough) out of pocket right now.
There’s a chance your tax bracket changed on Jan. 1—and the withholding you were taking from your paycheck might be the wrong amount these days. The IRS, though, has released a calculator to help you find out.
While it’s always nice to receive a refund check at tax time, keep in mind that those work out to interest-free loans to the government—and if your new tax bracket results in a significant reduction in your tax rate, there’s no reason to keep your withholding the same.
You’ll want to have a recent pay stub and your most recent tax return handy before getting started.
Should the calculator show that you’re taking too much or too little out of your paycheck, ask your company’s human resources department for a new W-4 form.
