Tax Issues to Be Aware of Before the End of the Year

 Posted on October 23,2018 in Taxation Law

Even though Tax Day for most people is in April, it is important to think about your taxes throughout the year. Reviewing tax information such as your withholding amounts and making sure you are keeping appropriate records as the year progresses are prudent measures that can save you money and trouble once Tax Day arrives.

If this is something that you have not thought a lot about, or if you discover an issue with your taxes, you should contact a tax attorney as soon as possible. It may still be early enough to correct course and resolve the issue before the end of the year.

Is it Time to Check Your Paycheck Withholdings?

With the recent revisions to the tax code made by the Tax Cuts and Jobs Act of 2017, the IRS encourages taxpayers to conduct a “paycheck check up” to review how much taxes are being withheld from your paycheck. The IRS provides a withholdings calculator to help you determine what the proper amount should be. If you need to adjust your withholdings, you can fill out a new W-4 form.

Specifically, the IRS encourages the following people to review paycheck withholdings:

• Families with dual incomes;
• Taxpayers who hold two or more jobs or only work a portion of a year;
• Taxpayers who rely on tax credits such as the child tax credit;
• Taxpayers who have dependents age 17 or older;
• Taxpayers who used itemized deductions in 2017;
• Taxpayers who report high income or tend to have a complex tax return; and
• Taxpayers who had a large tax refund or tax return for 2017.

Another group that should pay special attention to withholdings in the wake of the Tax Cuts and Jobs Act is retirees. Those retirees who collect a monthly pension or annuity check will likely need to alter the amount of taxes withheld. These taxpayers can also utilize the IRS Withholding Calculator to determine whether they need to make an adjustment. 

Call a San Jose, CA Income Tax Lawyer

At John D. Teter Law Offices, we have been representing individuals and businesses in tax law matters for over 30 years. We pride ourselves on offering realistic and practical solutions for your tax problems.  

The tax laws in the United States can cost you money if you are not strategic, or they can save you money if you are savvy and leverage them properly. To learn more about how to approach your tax strategy, call our firm today at 408-866-1810 to set up a consultation with our knowledgeable San Jose, CA income tax attorney. 

Sources:

https://www.irs.gov/newsroom/time-for-a-paycheck-checkup

https://www.irs.gov/newsroom/retirees-avoid-a-surprise-tax-bill-get-enough-tax-taken-out-of-pension-payments-irs-withholding-calculator-can-help