Washington Post, March 1, 2018
Change is hard, so can I put on my parent hat?
As you may know, Congress passed some major tax legislation at the end of last year. Actually, it turns out that 26 percent of Americans don’t know this, and about half haven’t heard that income-tax brackets are changing under the new rules as well, according to a recent survey by NerdWallet.
Here’s the thing: I know many of you will not want to do what I’m going to recommend. But like I tell my kids when they come up with excuses for not doing chores, “Do it anyway, and because I said so.”
This is what you need to do. Go to irs.gov and search for “Tax Withholding Calculator.” You’re going to use this updated tool to review and — if necessary — change your W-4 for 2018. This is the form (Employee’s Withholding Allowance Certificate) you fill out to make sure your employer is withholding the correct amount of federal income tax from your paycheck.
If not enough taxes are withheld from your paycheck or you earn additional money that is not subject to payroll taxation, you might owe taxes at tax time. You should aim to have your withholdings match your actual tax obligation.
I tried the calculator. It took me about 20 minutes — mostly because I didn’t have enough information at hand. You need your most recent paystub, your W-2 and information from your 2017 tax return.
[ Setting up an IRS online account is well worth the time ]
The first page of the calculator is not too intimidating. It asks you what filing status you’ll be using on your 2018 income-tax return. Here are your choices: single, married filing jointly, married filing separately, head of household, or qualifying widow.
This simplicity stops at the first page, but don’t be daunted. On the second page, you’ll have to answer questions about how many jobs you and/or your spouse have. You’ll be asked to check boxes if you contributed to a tax-deferred retirement plan (like a 401(k) or similar workplace account). You’re asked if you contributed to a “cafeteria or other pre-tax plan.” There’s a link that explains that it’s asking if you had payroll deductions for such expenses as health or life insurance or a flexible spending account. Throughout the calculator you’ll find hyperlinks to explain terms.
Update your recurring paycheck in CountAbout