To have and to withhold – Avoiding surprises on your 2019 tax return

Description

Abstract: When the TCJA took effect at the beginning of 2018, the IRS updated the withholding tables employers use to determine how much money to withhold from employees’ paychecks. The new tables caused employers to withhold substantially less than they had in the past, which increased paycheck amounts. But this past tax filing season, many people were surprised to receive smaller refunds than they expected. This article advises that, if it’s necessary for employees to increase their withholding, it’s not a good idea for them to wait until the end of the year; it’s better to spread the additional withholding over as many paychecks as possible, so each paycheck bite will be smaller. A sidebar explains that there are better ways to save than to wait for a large annual refund.