We’re half way through 2019. Time to check your withholding.
Posted on July 18, 2019
Teipen Selanders Poynter & Ayres CPA Mike Poynter recommends that all taxpayers check their withholding mid-way through the year – which is right now — even if they did one last year.
“We want to be sure enough is being taken out of your paycheck or other income to cover the amount of tax you may owe by year’s end. It’s a prudent way to protect against uncomfortable surprises.”
Here are some things to know about withholding and why doing a mid-year Paycheck Check up is so important:
- Nothing stays constant. Jobs change, raises happen, transfers to different states happen. In the excitement of change, you can absolutely forget life changes have tax consequences, positive and negative, including:
- Marriage or divorce
- Birth or adoption of a child
- Purchase of a home
- Chapter 11 bankruptcy
- New job or loss of job
- Child becomes independent
- Some taxable income is not subject to withholding including income from things like:
- Capital gains
- IRA distributions, including certain Roth IRAs
- You should also check their withholding if you experience changes to your:
- Medical expenses
- Interest expense
- Gifts to charity
- Dependent care expenses
- Education credit
- Child tax credit
- Earned income tax credit
The best way to check their withholding?
The easy to use IRS tool at IRS.gov Withholding Calculator on IRS.gov. But if you are uncertain about anything, as always, give us a call.