Enjoy that bump in pay thanks to the new tax law, because some earners may find themselves on the hook for more taxes in 2019.
In January, the Treasury Department released its income tax withholding tables, updated to reflect changes stemming from the Tax Cuts and Jobs Act. The new legislation cut individual income taxes, raised the standard deduction and eliminated personal exemptions.
You may begin seeing changes to your paycheck as early as this month.
The IRS is still working on an update to a key form — the W-4 — that determines the amount of income tax withheld from your pay based on a number of crtieria, including whether your spouse works, whether you have children and whether you itemize.
If you withhold too much, you'll be due a refund the following year. Fail to withhold an adequate amount, and you'll owe the taxman (and possibly penalties.)
That means certain taxpayers, particularly high-income earners and those who have itemized on their taxes, may need to revisit their W-4 or else risk owing the IRS in 2019.
Here's how to determine whether you're at risk for owing more taxes next year.