Posts Tagged ‘withholdings’

Confused about how much to withhold from your paycheck?

Written on January 10th, 2020 by Jamesno shouts

Everyone remembers the 2018 tax year where payroll tax withholdings were messed up due to the tax law changes.  A lot of folks ended up owing tax due to not withholding enough throughout the year.

The IRS has completely changed the W-4 tax withholding form that you fill out for your payroll department.  The new form does not have the old number of exemptions that we are all used to, but instead has a dollar amount that you calculate to either increase or decrease tax withholding on each paycheck.

Best part is the IRS has a great tool to help you figure out if you will owe or get a refund and how to adjust accordingly.  It only takes a few minutes and all you need is the most recent copy of your paystub:   www.irs.gov/w4app

Best part is when you get the results you have the option to print out a new W-4 form with the changes already entered.

More tax questions

Written on April 14th, 2014 by Jamesno shouts

A last minute tax question and resource for planning your exemptions for next year:

A client just emailed me with a last minute tax question that I thought would be beneficial to share with others.  ”I bought a new car in 2013 and instead of the annual ad valorem tax, I paid the new one time Georgia Title Ad Valorem Tax (TAVT), is it deductible?”  Georgia passed a law a few years back that removed the annual ad valorem tax and imposed a one-time tax on vehicle purchases made after 2012 (some 2012 were grandfathered if you elected), this basically meant that the annual  birthday tax was eliminated but instead was paid upfront.  So for all of you that itemize your deductions on Schedule A, can you deduct this one time tax just like you did each year with your ad valorem tax?  Unfortunately, the new tax is structured more like a sales tax instead of an annual property tax, so the short answer is no.  When you itemize you can however elect to deduct State Income taxes or Sales Taxes (just not both), so if your state income tax was real low then it is possible this TAVT tax could be lumped in with your Sales taxes on Schedule A and in that case it would be deductible.

Tax planning for next year:

I have received a number of questions on how to better sync withholdings on your paycheck so that it is closer to your actual tax liability.   This is helpful when you consistently find yourself owing money to the IRS each April 15th.  (or if you continually get a refund and are tired of giving uncle sam an interest free loan).  Below are two links to help you better plan your withholdings:

- IRS Withholding Calculator:  http://www.irs.gov/Individuals/IRS-Withholding-Calculator

- If you really are a glutton for punishment then jump right into Publication 505 to learn more:  http://www.irs.gov/pub/irs-pdf/p505.pdf