Last year, many taxpayers experienced paying unexpected tax bill due to having too little tax withheld. It was because the old W-4 form was no long applicable to compute the correct withholding after the Tax Cuts and Jobs Act (TCJA) was enacted in late December 2017. The TCJA made major changes in tax rates, standard deductions, tax credits, and also eliminated the personal exemptions (such as, tax payers, spouse and dependents). However, the withholding allowances on the old form W-4 was mainly based on personal exemptions.

The IRS recommend that taxpayers to access the W-4 Calculator on IRS website here to determine whether you need to give the employer the new form W-4 or adjust the quarterly estimated tax payments. If you have one job at a time, the withholding will be computed based on the filing status, standard deductions and tax rates.

If you have any questions or concerns about the withholding or if you have complex tax situations, you can consult the tax advisors at Ryan Goulding CPA. You can make an appointment here

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