Pump Up Your Paycheck
The tax overhaul lowered taxes for millions of Americans, but only 19% of taxpayers updated their withholding in response to the new law, according to a survey by H&R Block. If you received a large tax refund this year, adjust your withholding and give yourself a raise. You can use the extra money to pay off high-interest debt, build up your emergency fund or increase contributions to retirement savings plans.
Use the IRS’s Withholding Calculator tool to figure out how to reduce the amount withheld from your paycheck. Once you’ve crunched the numbers, file a new Form W-4 with your employer. If you ended up owing the IRS for 2018, the calculator can help you increase the amount withheld so that you won’t have to worry about a budget-busting tax bill next April.
