Author Topic: How are you handling 2018 W4’s  (Read 2104 times)

ETBen

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How are you handling 2018 W4’s
« on: December 28, 2017, 11:40:52 AM »
I’m wondering how to adjust my withholdings for my 2018 paychecks. I could keep it the same and then readjust once the IRS calculator is revised. My issue is that I changed jobs halfway through the year. I had to significantly adjust my withholding bc I would surpass the social security limit and overpay for several months (new payroll wouldn’t know how much I already earned and paid on). So my current withholdings would probably be too high for 2018. And I’m probably just really annoyed that I can’t easily anticipate what my taxes will look like for 2018 compared to before.

Nate79

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Re: How are you handling 2018 W4’s
« Reply #1 on: December 28, 2017, 11:42:43 AM »
I’m wondering how to adjust my withholdings for my 2018 paychecks. I could keep it the same and then readjust once the IRS calculator is revised. My issue is that I changed jobs halfway through the year. I had to significantly adjust my withholding bc I would surpass the social security limit and overpay for several months (new payroll wouldn’t know how much I already earned and paid on). So my current withholdings would probably be too high for 2018. And I’m probably just really annoyed that I can’t easily anticipate what my taxes will look like for 2018 compared to before.
I'm not aware that W4 worksheet has come out yet for 2018 to reflect the new tax law. How are you doing a 2018 W4 worksheet?

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ETBen

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Re: How are you handling 2018 W4’s
« Reply #2 on: December 28, 2017, 12:32:26 PM »
No worksheet. But this is usually when I re evaluate and change the withholdings in my employers system. Depending on how long it takes the IRS to put out a new calculator, I could be underpaying for several months. It’s like a nerdy little game to try and estimate as close as possible.

terran

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Re: How are you handling 2018 W4’s
« Reply #3 on: December 28, 2017, 12:44:29 PM »
I tend to more take the tact of hitting 100% of the previous year's tax owed (110% if you're higher income).

ETBen

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Re: How are you handling 2018 W4’s
« Reply #4 on: December 28, 2017, 04:15:44 PM »
I tend to more take the tact of hitting 100% of the previous year's tax owed (110% if you're higher income).

That’s probably my best bet. I still haven’t evaluated how much I think the new tax regs will affect me but at least I know how much I would normally pay in a year.

terran

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Re: How are you handling 2018 W4’s
« Reply #5 on: December 28, 2017, 04:21:19 PM »
I tend to more take the tact of hitting 100% of the previous year's tax owed (110% if you're higher income).

That’s probably my best bet. I still haven’t evaluated how much I think the new tax regs will affect me but at least I know how much I would normally pay in a year.

You might already know this, but hard to tell from your reply, so just to be sure, the reason I do that is as long as you pay 100% of last years total tax liability (110% if last year's AGI was over $150k) then you don't owe a penalty. You might still owe taxes or get a refund, but that just means you get/lose a bit of interest, but at least you won't owe more than you would if you got withholding just right.

ETBen

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Re: How are you handling 2018 W4’s
« Reply #6 on: December 28, 2017, 07:29:25 PM »
I wasn’t aware of that or don’t think I’ve encountered it?  My income has increased about 20-30% each of the past few years. So I guess I always end up paying the prior years amount. And then I have had a small refund each year.

walkwalkwalk

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Re: How are you handling 2018 W4’s
« Reply #7 on: December 28, 2017, 07:43:50 PM »
I wasn’t aware of that or don’t think I’ve encountered it?  My income has increased about 20-30% each of the past few years. So I guess I always end up paying the prior years amount. And then I have had a small refund each year.

That doesn't make sense. You should owe taxes if you pay same as last year and make more. Maybe you aren't paying same as last year just withholding with same number of allowances.

ETBen

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Re: How are you handling 2018 W4’s
« Reply #8 on: December 28, 2017, 07:56:40 PM »
I wasn’t aware of that or don’t think I’ve encountered it?  My income has increased about 20-30% each of the past few years. So I guess I always end up paying the prior years amount. And then I have had a small refund each year.

That doesn't make sense. You should owe taxes if you pay same as last year and make more. Maybe you aren't paying same as last year just withholding with same number of allowances.

Yes I’m paying more in taxes each year. But I’m not getting penalized for underpaying bc even if I were to owe, I would probably still have paid more than 110% of the prior years tax.

ETBen

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Re: How are you handling 2018 W4’s
« Reply #9 on: December 28, 2017, 07:59:19 PM »
Oh, I see how that reads differently now. Yes. I’m always paying more than the prior year bc of the salary bumps. But I also happen to get a small refund on the that current years taxes too, bc I still haven’t been able to get it just right (I swear I’m not that type A)

And I didn’t even know about this penalty, so I guess that really encourages you to overpay a bit and get a refund.

 

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