SAN ANTONIO – The current tax season isn't yet finished but the Internal Revenue Service says with a new tax code, people need to already be looking to 2019.
Specifically, you should make sure the deductions in your paychecks are still the best choices for your situation.
One way to do that is by using a now-updated online withholdings calculator.
It's on the IRS's website, and by the end of January had all of the new rules in place after the largest tax code overhaul in decades.
To prevent surprises when you file next year, it's a good idea to look at what is going to the government now.
"Right now the average refund nationwide is about $2,800. If you adjusted your withholdings so that you were just close to zero on a refund and you didn't owe, that's about $230 a month you could have in your pocket. It's up to you to decide whether you want a big refund, or you'd rather have the money now, but it's much better to have an accurate withholding, so you're not really over-withheld, or under withheld, which means you have to pay," Michael Devine with the IRS said.
When you start a job, you either fill out a paper or online W-4 form with your employer.
It tells them what to send to Uncle Sam, and has that box you put a number in, usually a one if you are single with no dependents. The smaller the number, the more they take out. You can update it at any time with your work.
Here's a breakdown of those the IRS recommends use the calculator:
- People working two or more jobs, or who only work for part of the year.
- Those with children who claim credits such as the child tax credit.
- People with older dependents, including children age 17 or older.
- Those who itemized deductions in 2017, or have high incomes and more complex returns.
"If you've lost a dependent, maybe they've, they've gone on on their own, so the number of exemptions you have, the standard deductions has changed, the exemptions have, have changed. There's a lot of changes in the tax law, it's, it's complicated, we're trying to make it simple, use the withholding calculator to get a good idea," Devine said.
The IRS says the sooner you do this the better, so you have more pay periods before tax time.
When using the calculator, you will need your latest pay stub and this year’s tax return.