Do You Need to Adjust Witholding?

Many taxpayers did not update their W-4 form last year which led to an increased in their paychecks throughout the year, but it was sometimes more than the decrease in their taxes. Tax liabilities may have decreased on average but the size of tax refunds stayed about the same.

The tax refund trends for the 2018 tax year are expected to be magnified in the 2019 tax year because the paycheck withholding calculations will be in effect all year. Failing to update a W-4 could mean that a taxpayer who had a decreased refund for 2018 could possibly see their refund decrease even more or possibly owe tax with their 2019 tax filings.

The IRS is expected to release a newly revised W-4 form in May and is recommending taxpayers update their tax withholdings.