“We realize there were many changes that affected people last year, and this penalty waiver will help taxpayers who inadvertently didn’t have enough tax withheld,” said IRS Commissioner Chuck Rettig.
“We urge people to check their withholding again this year to make sure they are having the right amount of tax withheld for 2019,” he said.
Here’s how to evaluate your withholding and make sure it’s just right for you.
Already filed? Look at your 2018 tax return: Whether you received a large refund or you wound up short with the IRS, your 2018 tax return is a guide to how your withholding currently looks under the new tax law.
Use that information to adjust your W-4.
Review your W-4: Striking a balance for withholding will be based on your salary, your spouse’s earnings and the tax bracket you’re in.
We’re in a year with many changes to the withholding table, plus a reduction in federal income tax rates. You may be taking home a slightly larger paycheck, but you should make sure you aren’t withholding too few taxes.
Talk to your accountant: Filers who withheld fewer taxes because they itemized on their returns will need to revisit their withholding. That’s because the new law does away with a lot of itemized deductions and places a $10,000 cap on state and local tax deductions.
Fewer filers are expected to itemize in 2018 because the new tax law has doubled the standard deduction. Under the previous law, about 49 million taxpayers — roughly 3 in 10 individuals — filed itemized returns, according to the Urban-Brookings Tax Policy Center.