With the fallout from COVID-19 affecting every taxpayer this year—whether it’s a change in employment status or pay fluctuations amid the pandemic—we wanted to take a minute to once again stress the importance of checking your pay stubs on a regular basis to ensure that your withholding is as you want it to be.
Many of our clients experienced sticker shock when the Tax cuts & Jobs Act of 2017 skewed the tax tables, and their withholding elections left them unexpectedly owing money.
We know that most people receive their payroll check through direct deposit, and paystubs are usually issued by e-mail these days. As a result, most pay stubs go unchecked, and unfortunately by the time the withholding deficit is discovered it’s already the following year—and too late to do anything about it.
To avoid this, we recommend making a habit of checking your pay stubs every month to verify the withholdings are per your instructions—even if you are not not paid via direct deposit.
And if you need to make adjustments, you can contact your HR benefits people to fill out a new w-4.
See our earlier post about the withholding here.