IRS launches new tax withholding estimator
MILWAUKEE (CBS 58) -- The Internal Revenue Service launched a new tax withholding estimator this year to help people target the refund they want by having the right amount of federal income tax taken out of their pay.
"People are still trying to figure out the changes, withholding tables versus the changes in all of the tax codes. I think this year will be better, maybe 2020 people will be back to normal," said Karl Klein, president of KKCPA.
The changes came after the the Tax Cuts and Jobs Act made major changes to the tax law.
"When tax season hit last year, people were seeing refunds lower and they were also seeing taxes due were more. I typically had to tell them, 'Were you getting more in each check? Oh yeah, I was getting more in each check.'"
Klein says there are some people who are susceptible to receiving lower refunds or owing money due to under withholding.
"A low-end person that in this economy suddenly finds themselves making more money...what they don’t realize is their low income tax credits get phased out," he said.
He said another group is people whose children are grown up and are no longer dependents.
"Those tax credits, maybe those child care credits, or daycare credits or earned income credits or even college tuition credits, all of a sudden those are gone," Klein said.
He also said it can be difficult for people with multiple jobs.
According to the IRS, it is important for people with more than one job to adjust their withholding to avoid having too little withheld. The IRS says using the Tax Withholding Estimator is the most accurate way to do that.