Tax Alert

Thinking about Taxes.  (internet image)

When the President and Congress passed the tax reform law at the end of 2017, there was a lot of information and speculation about what it would do and what it might mean for corporate taxpayers; rich taxpayers; middle class taxpayers; and the poor.

In late January, I saw a warning suggesting everyone check the withholding from their paycheck.

The message from the IRS: “Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter.

So, I did.  I discovered the withholding I did in 2017 would leave me owing Uncle Sam an additional $1,000 at tax time next year.  It offered suggestions on actions I could take now to avoid such a problem.

I'm glad I checked.  Getting the withholding right reduces a lot of the tax bill benefit, but in the new light it was borrowed money anyway.

Maybe you have nothing to worry about, but if you are like me you don't want to be surprised next April.

Here is the link to the IRS Withholding Calculator.

My cynical side thinks the extra money in our paychecks is to create positive feelings for those men and women we elected who hope we re-elect them this fall.  Then, early in 2019 we discover the tax break wasn't what we expected.

Whatever your opinion on that, it's still better to be safe than sorry.