With the numerous tax law changes in 2018, many people had to pay in. Why?
Remember how everyone got a little more on their paycheck in 2018. Whoopee!…. The fact is that if you did not change your W4, what you were paying in just wasn’t enough to cover what you’d owe at the end of the year. It may not be for 2019 either.
The biggest problem is probably the W4 you have at your job.
With personal exemptions being removed along with the $10000 limit on the deductions for state income taxes, real estate taxes and personal property taxes you’ve probably lost deductions you had in the past. Just claiming 0 for your exemptions probably didn’t help either.
If there’s a bright side it’s that you probably owed less in taxes than the previous year due to the changes to the tax brackets. That’s not good enough though, you still owed! OUCH! Who wants to pay taxes at the end of the year? To top that off, if you owed too much you could owe a penalty for underpayment.
How do you fix this?
You need to redo your W4. With just a bit of information, I can help you. Contact me and I will show you what needs to be done to your 2020 W4.