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Summer has gone by fast but I’m not ready to put away the barbecue just yet.  I am determined to have a couple more charbroiled burgers and steaks before the weather significantly cools.

Meanwhile, if you have a regular W-2 job (versus being self-employed like myself), now is the time to take a look at how much you’ve had in federal taxes withheld from your paycheck and determine whether enough will be paid for 2018 when you file your return, in order to avoid that “sticker shock” requiring you to come up with a substantial amount of money at the time of filing.  Alternatively, you may discover that you are having too much withheld from your paychecks, resulting in a large refund when you file which is money you could have had during to the year to pay your bills or invest.   Too many people, including some of my own clients, get excited about a large tax refund when they file but never seem to realize it was their money to begin with and they’ve given the government an interest-free loan.

The Internal Revenue Service can actually help prevent either scenario from happening with its very useful online withholding calculator, which helps determine whether you are having too little or too much withheld from your paychecks during the year.  Before accessing the online calculator, get your most recent paystub (and your spouse’s if your are married and file jointly) and prior year’s tax return and also estimate total child care expenses, mortgage interest and charitable donations as well as investment income for the year.  Most of the other numbers needed to calculate your estimated tax for 2018 will come from your most recent paystub(s), which should show the amount of federal tax withheld to date, as well as state taxes paid and any money put into your retirement funds as well as healthcare savings and/or childcare savings accounts.  You might be able to determine all these numbers, but try to at least estimate them.

Once you have the necessary numbers, go to the online Internal Revenue Service withholding calculator, available at:

The calculator will tell you if you need to increase your withholding, and if so, by how much to avoid potential underpayment penalties when you file your return, or if you should consider reducing your withholding to avoid receiving a substantial refund that essentially amounts to giving the government an interest-free loan.  Remember, answer the withholding calculator gives you will only be as good as the numbers you put into it.

Have a good and safe Labor Day weekend!