Be sure to double-check your withholding & estimated taxes

The individual tax changes as a result of tax reform can cut both ways. You may be familiar with the major deductions you are losing, but might be less familiar with the impact of some of the more favorable changes like the expanded tax brackets. It’s not easy or intuitive to figure out what it all means to your bottom line. There’s no substitute for actually running the numbers. If you are in danger of being penalized for underpaying tax throughout the year, you can make up the shortfall through increased withholding on their salary or bonus. Bumping up your last quarterly estimated tax payment can still expose you to penalties for underpayments in previous quarters. But withholding is considered to have been paid ratably throughout the year, so a big jump in withholding on high year-end wages can save you in penalties. So this year, getting a tax projection prepared just might be a very good idea.

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