MagnifyMoney says wage earners should update their W-4 form whenever a major life event occurs, like a recent marriage or a child’s birth. It’s particularly important this year, however, to review your withholdings as the new tax law went into effect Jan. 1.
Under the new tax law, many Americans saw their tax brackets change, with the standard deduction almost doubling for both individuals and married couples, as well as changes to other common tax credits. These changes could affect how many allowances you should claim and how much tax should be withheld from your paycheck.
If they leave their W-4 form unchanged for many taxpayers, their withholdings may be off, and they could owe — or be owed — more taxes than usual. Depending on your personal preference, getting a big tax bill vs. giving Uncle Sam an interest-free loan for the year may not bother you as much. But for others, withholding too much in taxes throughout the year — that is, paying more than you really owe and getting a refund later — could mean losing access to much-needed extra funds during the year.
Tax experts say it’s best if you owe no taxes at all and get a small refund in an ideal situation.
But where do you even begin to figure out whether or not you should adjust?
We’ll offer answers to key questions you may have in this post.
Experts we spoke with for this story have one common bit of advice for taxpayers: Check your paychecks and, if needed, adjust your tax withholdings for 2018 sooner rather than later. Read the full article at MagnifyMoney.