How To Fix Your 2019 Tax Bill Now
About two-thirds of Americans paid less income tax in 2018 under the Tax Cuts and Jobs Act of 2017 which went into effect last year. But many taxpayers were unhappy with their recent filing as they received a lower refund than they expected or even owed tax. People often count on their refund in order to fund a vacation, make a big purchase or use it for other purposes. Whether they notice it or not, they have actually made an interest-free loan to the government by letting them have more of their money during the year with tax withholding from your paycheck.
For most that were upset with this year’s refund or tax bill, the reason was due to income tax withholding. After the tax overhaul, the IRS and Treasury adjusted the tax withholding tables which factor into the amount of income taxes to be withheld from your paycheck. If you didn't update your W-4 for 2018 (and most people didn't), it’s highly possible this is why your refund isn’t as large as you expected.
The simplest way to fix your withholding is to take the additional amount you would like withheld and divide it by the number of remaining paychecks in 2019. Then, put that number on the IRS’s Form W-4 and give it to your employer.
If you would like to calculate your withholding more precisely, the IRS provides a calculator to determine what you will owe in 2019 and the necessary withholding.
For those that do not have income from wages, you can pay quarterly taxes on your income. If you have both wage income and non-wage income it makes sense to increase your paycheck withholding as it is not subject to the time constraints of quarterly payments.
For retirees with pensions or Social Security benefits, you can update your withholding with Form W-4P, or for Social Security Form W-4V. Fill out the Social Security form and return it to your Social Security office, either in person or by mail.