The IRS is putting out the word that many tax payers may not be withholding enough from their paychecks this year. Changes to the tax rules stemming from the Tax Cuts And Jobs Act of 2017 may have made the W4 filed with your employer not accurately reflect your circumstances. This can lead to too much or too little being withheld from your monthly paycheck. This is particularly a concern for families with two incomes and for those living in areas with high local taxes. The IRS has updated their withholding calculator at IRS.GOV to reflect recent tax law changes. This tool will be enough for many taxpayers to verify they are withholding enough and won’t be surprised with payments, penalties, and interest when filing season rolls around next spring.
For taxpayers with more complex tax situations we recommend professional help in better understanding the proper balance of withholding and estimated payments you should have to ensure you are in compliance. Advanced Tax Services will help you with planning to not only ensure your compliance, but also to ensure you are doing everything you can to minimize your tax bill. For example, small business owners may be eligible to receive a 20% deduction on qualified business income. This deduction can be taken by sole proprietors (including single member LLCs), partnerships, and S corporations. We can help you plan to maximize the potential deduction this year with appropriate business decisions. Reach out to us today for a free initial consultation and learn what we can do to help you.