Here’s another reason to revisit your tax withholding: Just over 2 out of 10 taxpayers will owe the IRS next year.
Those were the findings from a report by the Government Accountability Office (GAO), a legislative agency that provides data to Congress. That amounts to approximately 30 million people.
On the other hand, about 73 percent of taxpayers will be overwithheld — that is, they will pay too much to the Internal Revenue Service during 2018 — and receive a refund next year, the GAO found.
Earlier this year, the U.S. Treasury Department and the IRS released new withholding tables to reflect the new Tax Cuts and Jobs Act.
Changes stemming from the new law include the end of personal exemptions, the doubling of the standard deduction, and lower individual income tax rates.
The withholding tables are guidelines your employer follows in order to deduct the appropriate amount of income taxes from your paycheck.
They also work with Form W-4, which you can use to tailor the taxes withheld from your pay.
The GAO also found that under the old tax law, 18 percent of taxpayers — roughly 27 million people — would have been underwithheld.
Here’s how to review your pay stub and head off a surprise tax bill from the IRS in 2019.
Source : CNBC
