The One Thing Every Employee Has to Do in 2018 Due to the Tax Reform
The new tax reform, signed by U.S. President Donald Trump late last year, has brought major changes, and will bring even more changes this and next year.
Our Fort Lauderdale tax law attorney Ira Zuckerman warns taxpayers all across the U.S. that even though you will see changes to your paycheck this year, most of the changes spurred by the tax reform will be seen in 2019, when you will be filing your 2018 tax return.
However, there is at least one thing that every employee – in Fort Lauderdale, Florida and elsewhere across the country – has to do this year because of the tax reform.
This is what you have to do ASAP
Our tax lawyers say that you will have to review your tax form W-4 as soon as possible to reap all the benefits of the new tax legislation. W-4 is the form that is used by your employer to withhold the proper amount of federal income tax from your pay.
Why should you review your W-4 form in 2018 though? Because you need to make sure that you’re withholding the proper amount under the new tax bill.
Our Fort Lauderdale tax lawyers at Zuckerman Law, LLC remind readers that if you’re currently employed, then you most certainly filled out the W-4 form when signing your employment-related documents.
However, you can make changes to the W-4 form whenever necessary. In the form, you can claim a certain number of allowances. Under federal and state laws in Florida, you get an allowance for being married, having kids and/or being a head of household, and other.
Depending on the allowances that you claim, the form will determine how much of your paycheck will be withheld for taxes.
How to fill out the W-4 form in 2018?
It is highly recommended to consult a tax law attorney when filling out the form. Many employees may be confused by the new tax legislation, which is why only a lawyer can advise you what’s the best way to complete the W-4 form so that you avoid withholding not enough or paying too much.
Either way is bad, as you could end up owing the IRS or having a large refund, or even facing legal action for failing to withhold the right amount.
Under the new tax legislation, you no longer get an exemption per person. Before the tax reform 2018, employees in Fort Lauderdale and elsewhere in Florida would put a “1” for themselves, “1” for their spouse and the number of children they have. All those numbers would then add up to get a withholding exemption.
How to update W-4 form?
But how do you adjust your withholdings under the new legislation? Our Fort Lauderdale tax law lawyer Ira Zuckerman says it’s best to start by using the IRS withholding calculator.
After you complete each stage of the calculator, you can review what your current withholding is. If the current withholding, as per the new tax bill, doesn’t match the withholding in your W-4 form, it’s vital to change your W-4 withholding accordingly.
But how do you update the tax form W-4? The best way to do is to go through your HR department and request an update. By not updating the form, you risk over-withholding or under-withholding.
Adjusting your W-4 form is not the only thing employees are required to do due to the tax reform. In order to find out what other changes the new tax legislation has brought specifically for you and your family, speak to a lawyer.