SIOUX FALLS, S.D. – You may have a big financial problem next year.
Congressional auditors say 30 million people – more than 20 percent of U.S. taxpayers – will have to come up with more money to pay their taxes.
That’s because their employers are withholding too little from their paychecks under the new tax law.
Here’s how you can make sure you’re not one of them.
Over the past few weeks Tim Ness at Ness Tax and Bookkeeping Service has been getting calls from people concerned that they’re going to be in for a big, bad financial surprise next time they file their taxes.
“It’s a lot better to take that action now then wait until later in the year,” Ness said.
How do you make sure your employer is withholding enough money? Ness recommends going to the withholding calculator on the IRS website. Have a prior income tax return and a year-to-date pay stub for you and your spouse handy.
“It’s a smart idea for everybody to take a look at their pay stub to make sure enough, if any, federal withholding is being taken out,” Ness said.
If you realize your employer is not withholding enough money, what should you do next? Fill out a new W-4 form.
“Submit that to your employer and hopefully correct the problem before year end,” Ness said.
While Ness recommends that everyone takes these steps, it may be even more important for some of you.
“I would say for married couples earning $75,000 and above there could be a chance that those folks have not estimated enough withholding because they could be caught in between brackets,” Ness said.
A potential problem that is best dealt with right away.
You can find the IRS withholding calculator here.
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