Dear Clients & Friends,

What seemed like an anomaly early this year has proven to be a disturbing fact - many Americans are not having enough federal tax withheld from their paychecks. If the problem is not addressed quickly, taxpayers who have grown accustomed to receiving a tax refund in April will be writing the Government a check! Many of these checks will be for thousands of dollars. Don’t believe for a second that the Tax Cuts and Jobs Act was bogus, although there will be many pundits ready to blame Trump for the problem. Although it appears many Americans will owe money at tax time, we believe the majority of our clients will have a lower tax liability in 2018 than 2017. The culprit is the payroll tax calculators not withholding enough to cover the taxpayer’s liability. 

Taxpayers with multiple income sources are the most likely to be affected. Many of our clients look like this - retired military / Government check, an active second career check, and a working spouse. If this is your situation you should do some homework now to prevent a negative surprise early next year. Gather your most recent paycheck stub and follow the link below to the IRS payroll tax calculator. Enter the required information as directed and view the results. Conservatively, assume your tax liability (line 63 on Form 1040) will be the same in 2018 as it was in 2017. This is a good base line number to determine if you are under-withholding. Take immediate action if you have a substantial projected shortfall. As always, your team at Mason & Associates is here to help you navigate this problem. If you discover your payroll provider has put you in a deficit situation, call us to get our help fixing the problem.