Check System
Send us your comment!

Your comment will be read by our web staff, but will not be published.

Please do not enter any personal information. Your comment is voluntary and will remain anonymous, therefore we do not collect any information which would enable us to respond to any inquiries.

However, IRS.gov provides a How to Contact the IRS page where you will find guidance on where to submit specific questions.



Share this presentation
Copy and paste the following URL to share this presentation
To email a link to this presentation, click the following:
Bookmarks
This program writes a small 'cookie' locally on your computer when you set a bookmark.
If you want to utilize this feature, check the following checkbox. Otherwise, bookmarks will be disabled.
This is an IRS
audio presentation.

To view this page, ensure that Adobe Flash Player
version 10 or greater is installed.

Get Adobe Flash player

AARON STEELE: OK. It's the top of the hour and for those of you who have just joined, welcome.

My name is Aaron Steele and I am your moderator for today's presentation, Understanding How to Do a Paycheck Checkup. Joining me today are my colleagues Karen Brehmer from Bloomington, Minnesota and Evette Davis from Charlotte, North Carolina. They both represent the IRS and outreach and educational events, working with tax professionals, industry and small business owners and have been employed with the IRS for many years. Before we begin this presentation, I'd like to ask that if you are with the media, please send us an e-mail message at the address provided on this slide. That address is CL.SL.Web.Conference.Team@IRS.gov. In your e-mail, include your contact information and the news publication you're with. Our media relation or stakeholder liaison staff can assist or answer any questions you may have. For those of you who have just joined, I'll review a few more items. Audio for today's webcast is available through your computer speakers only. In case you do experience a technological issue during the broadcast, this slide shows some helpful tips and reminders. We've posted a technical help document that you can download from the materials button on the left side of your screen. It provides the minimum system requirements for viewing this broadcast, along with some best practices and quick solutions. And if you have completed and passed your system check and are still having problems, then you can try one of the following. First option is to close the screen where you're viewing the web conference and relaunch it. Second option is to click on the gear icon on your viewing screen that you can find in the top right corner of the slide and photo boxes. You'll be given two choices. Select flash instead of HLS from the available media box. If you do not have the gear icon and relaunching your viewing screen doesn't fix your problem, try using a different browser to launch and view the web conference. While you're viewing this webcast, may we suggest that you close all the windows and apps you have open on your computer. Besides helping you stay focused on what you will be learning, your viewing experience should also improve without all of the other bandwidth competition. You may have received today's PowerPoint, resources, and technical support document in a reminder e-mail. If you did not receive the reminder e-mail, you can download the documents by clicking the materials button found on the left side of your screen as shown on this slide. Again, if you continue to experience problems, we recommend you use a different browser to launch and view the web conference. If you have trouble hearing the audio through your computer speaker, closed captioning is available during today's presentation. Just click the CC button on the left side of your screen to access it. During the presentation, we'll take a few breaks to share knowledge-based questions with you. At those times, a polling style feature will pop up on your screen with the question and multiple-choice answers. Select the responses you believe is correct by clicking on the radio button next to your selection and then click submit. As a note, you may need to turn off your pop-up blocker to receive these questions. If you do not get the pop-up box for responding, please enter your response timely in the ask question feature so we can track your participation. If you have specific questions for us today, please submit them by clicking on the ask question button also on the left side of your screen. If you have a question during the web, during the web conference, please enter it in the text box and then click submit and please, please, please do not enter any sensitive or taxpayer specific information. We ask that you wait for your specific topic to be addressed before submitting your question. Oh, one more thing. We really do appreciate your questions. So, don't be shy.

Go ahead and submit them. Now let me turn it over to our presenters, Karen Brehmer and you Evette Davis. KAREN BREHMER: Well, great. Thank you so much, Aaron. We appreciate you getting us started and good afternoon, everyone. My name is Karen Brehmer and I'm here with Evette Davis and we're going to cover the topic of Understanding How to Do a Paycheck Checkup and that means you're checking to see if you have enough tax withheld from your wages to cover your tax liability at the end of the year. This is a really important topic. It's important for employees, but it's also important for employers and tax professionals as well. So, let's go to the next slide and I'll explain the reasons why you might want to do a paycheck checkup.

So why should employees do a paycheck checkup? Well, for a number of reasons. They should do it because they want to protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. They want to do it to avoid having too much withholding. (um) People might want to receive more in their paychecks throughout the year.

And also, some tax law changes in the Tax Cuts and Jobs Act may affect your withholding. So, these changes, which took effect in 2018, could affect your tax liabilities for tax year 2018 and 2019 and future years and by extension, that's going to affect how much you'll owe or the size of your refund when you file your tax return next year. So, we encourage everyone who earns wages to conduct a paycheck checkup. Checking your withholding now can help protect against having too little tax withheld from your pay and facing an unexpected tax bill and possibly a penalty at tax time next year and it can also prevent you or your employees from having too much tax withheld. With the average tax refund (um) around $2,800, some taxpayers might prefer to have less of a refund when they file their tax return and instead receive more money in their paychecks throughout the year. Now, having said all that, a bigger refund is usually not a problem. The real problem is under-withholding. Finding out that you owe taxes when you thought you were going to get a refund is not a surprise most people like. So not only should employees be doing a paycheck checkup, but we really encourage employers to encourage their employees to do a paycheck checkup and we also encourage tax preparers to encourage their clients to do a paycheck checkup to avoid any unpleasant surprises when they're filing their tax return next year. So, there are some key tax law changes in the Tax Cuts and Jobs Act that effect your withholding and they are: Lower tax rates for most taxpayers; the standard deduction has almost doubled (um) and these amounts are adjusted each year, so they'll be a little bit higher next year; and there are changes to exemption. Personal exemptions and exemptions for dependents have been eliminated. Now, here's a few more changes from the Tax Cuts and Jobs Act: The Child Tax Credit has increased from $1,000 to $2,000 per child and eligibility for the credit has been expanded; there's a new credit for other dependents like an older child who is in college or an elderly parent, that credit is $500 per dependent; and certain itemized deductions have been eliminated or discontinued. For example, the state and local tax deduction has been limited to $10,000 and this limitation applies to property taxes and either income or sales tax. So, to find out more about the withholding changes and how they affect your tax return, go to the IRS website. We have a really great page on tax reform. To find that page, go to www.IRS.gov and put "tax reform" in the search box and the link is actually shown on this slide as well. And now I'd like to turn it over to you, Evette. Evette, the floor is yours. EVETTE DAVIS: Thanks, Karen and good afternoon, everyone. Now, the IRS always recommends that all employees check their withholding at the beginning of each year or when their personal circumstances change to make sure they're having the right amount of tax withheld from their paychecks, but after the law change in December of 2017, it's especially important for certain people to use the Withholding Calculator found on IRS.gov to make sure they have the right amount of withholding. Even taxpayers who've changed their 2018 withholdings should recheck their withholding in 2019. A mid-year withholding change in 2018 may have a different full-year impact in 2019. So, if taxpayers don't submit a new Form W-4 for 2019, they're, their withholding might be higher or lower than intended. Now, each year, the IRS releases updated withholding tables that employers use to calculate the amount of tax to withhold from their employees' paycheck. These tables are designed to produce the correct amount of tax withholding, avoiding under, and over withholding of tax for those with simple tax situations.

Simple situations include those who are single, married couples with only one job, those who have no dependents or who have not claimed itemized deductions or even adjustments to their income or tax credit. Now, people with more complicated financial situation might need to revise their W-4 to get the desired amount of withholding as well. Among the groups who should definitely check their withholding are two income families, people working two or more jobs or who only work for part of the year, people with children who claim credits such as the Child Tax Credit. Now, others who should check their withholding include people with older dependents, including children age 17 or older, people who have previously itemized their deductions, people with high incomes or more complex tax returns, people with large tax refunds or large tax bills on their prior year return. Even retirees should check their withholding.

(Hmm) Sounds like in fact everyone should check their withholding. What do you guys think? So it's always a good idea, no matter what your circumstances are, to do a paycheck checkup every year. OK, everyone. So, the easiest way to do a paycheck checkup is by using the Withholding Calculator on the IRS' website. The link to the calculator and to more information on how to do a paycheck checkup is on the webpage screen you see is listed here at www.IRS.gov/withholding. You can also get here by doing a search for keyword "withholding".

Now, the amount of income tax your employer withholds from your pay depends on two things - the amount you earn and the information you give to your employer on Form W-4. The IRS Withholding Calculator allows you to check your withholding and will give you a recommendation for what to put on your Form W-4 if you need to make a change. And if you do need to change your withholding, you will need to submit a new Form W-4 to your employer. Now, I'll discuss this a little bit more in detail a little later. Back to you, Karen. BREHMER: Great.

Thank you, Evette. So, when you click on the link for the Withholding Calculator, it takes you to the landing page and it looks just like what you see on your screen now. All you have to do from here is click on the Withholding Calculator link. It's in the middle of the landing page and that's what will (um) help you to launch the Withholding Calculator. So later, we'll show you what the Withholding Calculator looks like and we're actually going to walk through a sample calculation, but before we do that, Aaron, I think it's time for our first polling question.

STEELE: Think you're right, Karen. Audience, our first polling question asks, "Who among this group should check their withholding?" Is the answer, A, two income families, B, people working two or more jobs or who only work for part of the year, C, people who previously itemized deduction or is the answer D, all of the above? OK, audience. Take a look at the question and the possible answers again. Now go ahead and click in the radio button you believe correctly answers this question. We'll give you a few more seconds. Let's stop the polling now and see the correct response on the next slide. And, the correct response is D, all of the above.

Let's see how you did. We're shooting for 100 percent. Ninety-nine percent. This is a great start, but we're shooting for 100 percent. Other groups include people with children who claim credits such as the Child Tax Credit, people with other dependents including children age 17 or older, people with high incomes and more complex tax return. OK, Karen, why don't you tell them what they need to get started? BREHMER: I would be happy to do that, Aaron. So, the Withholding Calculator will ask you to estimate the value of your 2019 income. It'll ask you about the number of children that you're going to claim for the Child Tax Credit and the Earned Income Tax Credit and it's going to ask you other items that will affect your 2019 taxes and the process does take a few minutes. Now, before you get started, we have some recommendations of things you should do before you get started. You want to gather your most recent paycheck stubs. Very handy to have those next to you when you're doing the Withholding Calculator. Also, you want to have your 2018 tax return or your most recent income tax return handy. Having that copy of your completed 1040 will help you estimate your 2019 income and other characteristics and having that available just helps speed up the process. Now, do please keep in mind that the calculator's results will only be as accurate as the information you provide. So, if your circumstances change during the year, maybe you itemized last year, but you're not going to itemize this year or maybe you received a large tax refund last year, you want to come back to this calculator and make sure that your withholding is still correct. Something else we'd like you to know, we know that people are pretty wary about disclosing their personal information on computer systems because we've all seen stuff on the news related to identity theft, but the Withholding Calculator doesn't request personally identifiable information. It doesn't record any information that the user entered. So, you never have to worry about your personal or financial information being disclosed when you're using the Withholding Calculator. You don't, you don't even enter your social security number, you don't enter your bank account number or anything like that. And again, it shouldn't take too long to input the information that's needed to complete the process. Now, Evette's going to start walking us through the pages of the Withholding Calculator. Evette, back to you. DAVIS: Thank you, Karen. All right, folks. Karen and I are going to walk you step-by-step through the process of using the Withholding Calculator. So, let's go ahead and get started. Now, first, the calculator will ask you some general information questions. This slide shows the first two questions asked: Number one, what is your filing status and number two, can someone else claim you as a dependent? Now, before we move on, let me explain what the underlying items in blue are.

These are hyperlinks that give an explanation of the item highlighted. For example, if you click on qualifying widow, widower, a pop-up window will open and explain how someone qualifies as a qualifying widow or widower and it refers you to a resource if you want more information on that particular topic. Now, on this screen, you are required to input or indicate the following, the number of jobs you have now, let me stop right there. Just as an FYI, the number of jobs you have will impact what you see in the subsequent screen and we'll see that in just a moment. And let me just highlight that even though they are not actual jobs, this is also where you would count or enter military retirement pay or taxable pensions and you would list them as a separate job, OK? So additionally, you would check on this screen if you held a job this year, but you are no longer employed in that job. You would also check if you contributed to a tax deferred savings plan like a 401(k). You would also check if you contributed to a cafeteria or pre-tax plan like the health insurance, if you received a scholarship or fellowship grant that must be included in gross income. You'd also check if the number of dependents you will claim on your, I'm sorry. You would also check the number of dependents you will claim on your return on this slide. You will also have to check if you will be over 65 years of age on January 1st, 2020 or if you are blind. All right, Karen. Back over to you. BREHMER: Great. Thanks, Evette. So now let's talk about the lower portion of the page (um) for the Withholding Calculator. The lower portion of the general information page addresses any credits that you may be eligible for, such as the Child Tax Credit, Earned Income Tax Credit and work-related child and dependent care expenses and this is where your prior year return can help you determine what you need to input for this year's calculation. And again, just remember sometimes last year's circumstances don't apply to the current year. For example, your dependents might age out of qualifying for the Child Tax Credit or for the Earned Income Tax Credit. So, with that said, still using the prior year return can be a good guide as to what you should input on this screen. (Um) I mentioned the term age out. When we say a dependent might age out, that means your dependent will be a year older this year and maybe now they're too old to qualify the parents for some of the tax credits. And if you want to find out more about tax credits for children, enter the name of that credit in the search box on IRS.gov. Examples would be the Child Tax Credit, Earned Income Tax Credit or the Child and Dependent Care Credit. The calculator goes on and it asks you about your wage and withholding information. So, here's the wage and income entry screen for a taxpayer with only a single job.

It asks for gross wages, bonuses, your withholding to-date. So that's the cumulative or the total amount of withholding from the start of the year until now. It asks you to enter your withholding amount from your current paycheck. It asks you to enter how often you're paid, for example, weekly, bi-weekly or monthly, and then it asks you when did your job begin and end during the year. So, if you worked the whole year at this job, this information is already pre-populated, January 1st, December 31st. And if you indicated that you or your spouse are filing jointly or that both of you are working or that you, that you worked more than one job, there will be separate columns to enter that information from each job and we're going to show you how to deal with multiple jobs on the next slide. One other tip for you, you'll need to enter information in each field that has an asterisk next to it. So, if there's an asterisk and it doesn't apply, let's just enter zero. So, the fields with an asterisk, you must enter something. But Aaron, it looks like our next thing is that we have a polling question coming up next. And Aaron, if you're doing the polling question, you might be on mute. STEELE: I'm ready now. BREHMER: OK. Great. STEELE: (Laugh) Sorry about that. That's right, Karen, it's time for our second polling question and it's a true or false one. Age out means your dependent will be a year older this year and maybe they are now too old to qualify the parents for some of the tax credit. Is the correct response, A, true or, B, false? Please click in the radio button you believe correctly answers the question. I want you to look at the question again, mull it over because we want to get to 100 percent and click the radio button for the one you believe is the correct response. You can have a few more seconds. All right. Let's stop the polling now and show the correct response on the next slide. The correct response is A, true. Let's see how you did on this one. As always, we're shooting for 100 percent. OK.

We went down a little bit. We're at 98 percent now, but that's OK. It's OK. OK, Evette.

Back to you. DAVIS: (Laugh) Thanks, Aaron. I think 98 percent is pretty doggone good. OK.

(Laugh) All right, folks. So, let's move on. If you have multiple jobs, you will see a different screen. Now, this slide shows the wage and income entry screen for multiple jobs.

It asks for the same information for each job. It asks for gross wages, bonuses, withholding to-date, withholding amount from your current paycheck, how often you're paid and when did the job begin and end during the year. Now, if you work the whole year, as Karen mentioned, this information is already pre-populated. You can enter up to 10 jobs in the Withholding Calculator. Now, also remember you can also use the Withholding Calculator if you have pension or retirement income. You treat the pension and retirement income as regular pay for income tax purposes when using the Withholding Calculator, but only for the Withholding Calculator. You enter pension and retirement amounts just like you would a job right here in the income and withholding page in the Withholding Calculator. Now, unfortunately, you can't report Social Security income using the Withholding Calculator. Treatment of the Social Security benefits is a little more complex and it's not addressed by the Withholding Calculator. So, taxpayers with more complex situations like Social Security income should use Publication 505 which is the Tax Withholding and Estimated Tax Guide to check their withholding. Once again, people receiving Social Security should not use the Withholding Calculator. Instead, they should use Publication 505 just to check to see if their withholding is correct. I'll talk about the Publication 505 a little later in the presentation. Next, the bottom of the income page asks for other information that might affect your tax, such as other taxable earned income, such as net self-employment income or tip income, unemployment compensation or non-wage income such as dividends or interest income and you should also enter an estimate of any adjustments to taxable income you expect such as the IRA contribution. Now, you can use a calculator if you have a small amount of self-employment income. If your main source of income is from self-employment and you make estimated tax payments on that income, but you also have wage income, then you should probably use Publication 505 to figure your withholding on the wage income. All right, Karen. Tag, you're it. BREHMER: (Laugh) I got that tag. No problem.

So, the next page is on itemized deductions and you'll want to complete this screen if you expect to itemize your deductions when you file your tax return. If you plan to use the standard deduction, you can just leave these fields blank and the calculator will tell you the amount of the standard deduction for your filing status based on the status you chose back on the first page of the calculator. And the calculator will use the amount that benefits you most. The only exception is if you checked the box to say that you want to use itemized deductions even if they are less than your standard deduction. Then once you're done inputting information onto this screen, click continue for your results and the next page you see is the results page. It gives you an outcome based on the information that you submitted. It's going to show you the amount of anticipated tax, whether you have enough, too little or too much withholding and the calculator will also give you suggestions on how to complete a new Form W-4 to change your withholding if that's necessary. If you want your withholding to more closely match your anticipated tax, then you want to adjust your withholding on a new Form W-4 by following the directions on the results page. And Aaron, it looks like it's time for our third polling question. STEELE: You're right, Karen. Audience, on this one you have multiple choices. Here we go. The results page gives you an outcome based on the information you submitted. It will show you, A, the amount of anticipated tax, B, whether you have enough, too little or too much withholding, C, the calculator will also give you suggestions on how to complete a new Form W-4 to change your withholding if necessary or is the answer D, all of the above? All right. By now you know how this works. Take another look at the question and the possible answers, make your selection and remember to click the submit button. I'll give you a couple more seconds. OK. Let's stop the polling and share the correct response on the next slide. And the correct response is D which is all of the above. That is the amount of the anticipated tax, whether you have enough, too little or too much withholding. The calculator will also give you suggestions on how to complete a new Form W-4 to change your withholding if necessary. Let's see what the percentage answered correctly is and the percent now is 99 percent. We're back to where we were before, but remember, we're trying to shoot for 100 percent. OK, Evette. Tell us about the recap portion of the Withholding Calculator. DAVIS: Thanks, Aaron. You're tough, man. I sure will. Let's get started on the recap information.

OK. So below the results, you'll find a summary or recap of the information you entered.

Now, this makes it easier to check for any mistakes you might have made when entering information into the Withholding Calculator. Now, remember, the calculator's results are only as accurate as the information you enter. So, it's a good idea to review this page. It's also a good idea to print this page for your records. It's not required, but it is a good idea.

Now, this Withholding Calculator works for most taxpayers, but people with more complex tax situations should use the instructions in Publication 505, which, once again, is the Tax Withholding and Estimated Tax Guide. Now, I'll go over who should use Publication 505 in a few minutes. I do want to take a moment to point out some tips for using the Withholding Calculator. Now, the Withholding Calculator is not really cellphone friendly due to the small font size to fit all the information it needs. So, unless you have excellent eyesight, you might want to perform your paycheck checkup on a tablet, a laptop or even a desktop computer.

Also, you may want to jot down figures you enter or even better than that, we've found that printing your pages as you go along is a best practice. Now, that way, you don't have to worry about jotting down the figures because if you get to the recap and find out that you've made a mistake, you can't just go back and correct the mistake. No. Unfortunately, you will have to start the process all over again. So be careful when inputting your information and consider writing down or, as we suggest, just printing the pages to show the amounts you used in case you need to re-enter or update that information. Now, the question I hear a lot is what if I don't have enough withheld? Panic sets in, right? So now, if the calculator says you won't have enough tax withheld by the end of the year, no worries. Simply follow the directions provided by the Withholding Calculator to complete a new Form W-4 using the calculator results.

Give that new Form W-4 to your employer. I repeat, give that new Form W-4 to your employer.

Do not send it to the IRS and you need to do this as soon as possible to increase your withholding. Remember, withholding takes place throughout the year. So, the earlier someone does a paycheck checkup, the more time there is for any changes and withholding to take place more evenly throughout the rest of the year. Now, heads up, everyone. If you end up owing too much on your return, you won't just have to pay the additional tax. You might have to pay an additional and an underpayment penalty, OK? All right, Karen. Turn it over to you.

BREHMER: Great. Thank you, Evette. So, let's say the Withholding Calculator indicates that you have too much withheld. Well, one choice you have is to leave your withholding the same and you'll get a larger refund, but if you could use a little more money in your regular paycheck, you can give your employer a new Form W-4 requesting less money be deducted from your paycheck.

And as we said, you give the W-4 to your employer, not the IRS. Some employers allow you to change your withholding by submitting your W-4 electronically. So, you'll want to check with your employer about that. Another really important thing is (um) if you change your withholding in the middle of the year or any time during 2019 really, you need to check your withholding again at the start of next year, at the start of 2020, and that will help you ensure that you won't be under-withheld or over-withheld for 2020. So, it's always a good idea to check your withholding at the beginning of every tax year or whenever your personal circumstances change and you're doing this just to check that you're having the right amount of tax withheld for your personal situation. And we've talked about some circumstances throughout the presentation, but let's review some of them again. If you adjusted your tax withholding in the middle or later part of 2018, if you are a two-income family, if you have two or more jobs at the same time or you only work part of the year, if you claim credits like the Child Tax Credit or maybe you have dependents that are age 17 or older or you have high income or a complex tax return. So, tag, Evette. It's all yours. DAVIS: Thanks, Karen. Tag caught and that was some great information and great advice. OK. So, I mentioned the Publication 505 earlier.

People with more complex tax situations should use the instructions in Publication 505 instead of the Withholding Calculator and these are people who owe self-employment tax, owe alternative minimum tax, have tax on unearned income of dependents, those who have long-term capital gains or qualified dividends or folks who owe certain other taxes. Now, as I mentioned, if you are self-employed, instead of using the Withholding Calculator, we suggest you use IRS Publication 505 to compute the amount of estimated tax payments you will have to make. Now, what I'm about to say has nothing to do with the Withholding Calculator, but when reviewing Publication 505, just know that it's important to remember that in certain circumstances you or your spouse, if you're married, can increase your withholding to cover all or part of your estimated tax payment. This is especially applicable if you earn wages, but you're also self-employed. So, you have a choice. You can make estimated tax payments with the 1040-ES if that's easier for you or you can increase your withholding instead of making those estimated tax payments. Now, some people like increasing their withholding so they don't have to worry about making those estimated tax payments, which is fine. All right, Aaron. Looks like we have time for one more polling question. I'm going to throw it over to you. STEELE: That's right. OK, everyone.

It's time for our fourth and final polling question, which is a true or false statement. It's always a good idea to check your withholding at the beginning of every tax year or whenever your personal circumstances change. Is it, A, true or, B, false? You're pros by now. You know what to do. Make your selection. Just a few more seconds because this is a easy one here. We're going to stop the polling now. The correct response is on the next slide. And the correct answer is, A, true. It's always a good idea to check your withholding at the beginning of every tax year or whenever your personal circumstances change. Let's check the polling results and see did we get our, did we reach our goal of 100 percent? Let's see.

One-hundred percent. (Laugh) Great job, everyone. You guys are after my heart. OK, Evette.

Would you please share a few reminders and resources with everyone? DAVIS: Woohoo. Great job indeed, Aaron. OK, folks. We are in the home stretch. Now, just a few reminders. You can do a paycheck checkup using the IRS Withholding Calculator. You can access the calculator at www.IRS.gov/withholding as seen on the screen or by typing "Withholding Calculator" in the keyword search box on IRS.gov's website. Remember to download the resource guide Aaron mentioned at the beginning of this session. It's got some great, great information and some links in it that will be beneficial to you after today. As we mentioned earlier, people with more complex tax situations than those addressed by the Withholding Calculator should use the instructions in Publication 505, which is the Tax Withholding and Estimated Tax Guide. This includes those who owe self-employment tax, the alternative minimum tax, tax on unearned income from dependents and people who have capital gains and dividends. Now, of course, if you decide you need to change your withholding, you'll need to complete and submit a new Form W-4 to your employer. In addition, if you need to pay more tax during the year and can't or prefer not to adjust your current withholding, you can make estimated tax payments using Form 1040-ES, the estimated tax form for individuals and pay by check or you can make those payments using IRS Direct Pay or by EFTPS, which is the Electronic Federal Tax Payment System. OK, Aaron. Back to you. STEELE: Hello, again. It's me, Aaron Steele, and I will be moderating the Q&A session. Before we start the Q&A session, I want to thank everyone for attending today's presentation on Understanding How to Do a Paycheck Checkup. Evette Davis and Karen Brehmer will be answering your questions. If you haven't input your question, there's still time. Go ahead and click on the ask question button, type your question and click submit. One thing before we start. We may not have time to answer all the questions submitted, however, let me assure you we'll answer as many as we have time for. If you are participating, if you're participating to earn a certificate and related continued education credit, you will qualify for participating for at least 50 minutes from the start time of the web conference. You don't need to stay on for the full 60 minutes, but we hope you will. Evette and Karen, we've received a lot of questions, so let's get started so we can get to as many as possible. Evette, this first question I have is for you. OK. What do you mean by life circumstances? Can you give me some examples? DAVIS: Oh, OK. Yes. So that's a great question, Aaron. So basically, when it comes to doing a paycheck checkup using the Withholding Calculator once or twice per year, it can only help you if only to ensure that you're on the right track for having an accurate amount of tax withheld. Now, it's even more important to do a paycheck checkup if you've had what we call changes in your life circumstances, though you may see it listed as personal circumstances. (Um) So some of those examples include if you got married. So, if you start off the year and you're single and then you get married, as a single person, your standard deduction, for example, is $12,000, but if you get married and you file a tax return married filing joint, then your standard deduction doubles to $24,000. Other life circumstances can include a divorce, birth of a child or if you're like me and you have a child who you can no longer uh consider as a dependent. Some other examples can include increases or decreases to your income, like if you get a second job or you get a pay raise or a promotion, woohoo, or if there is retirement that happened during the year. These are just a few examples to changes or changes to your life circumstances that can affect your withholding allowances. So, doing a paycheck checkup is very, very important. Now, a couple of resources. We've all, we've talked about the Publication 505 throughout the presentation. Another option is the Publication 501 which talks about the dependent, standard deduction and filing information.

These are two great, great resources for folks to use. All right, Aaron. Back to you.

STEELE: Thank you, Evette. Those were some good examples. Karen, can you take this question for me? Did you say you should use the Withholding Calculator at the beginning of every year? BREHMER: Yes. I did say that, Aaron. (Uh) If you changed your withholding in 2018, you want to check it again in 2019. If you checked your withholding in 2019, you want to check it again in January or February of 2020 and really the same thing every year. And again, the point of it is to see if you need to change your W-4 for that year. Here are some things that might happen to folks. Let's say you do the Withholding Calculator now and you reduce your withholding in 2019. Well, you want to check it again in early 2020 because you need, you need to increase it again at the beginning of 2020 so that you're OK for that 12-month period.

Some people might do the Withholding Calculator now and they might increase their withholding for the rest of 2019, but those folks might be able to reduce it at the beginning of 2020 and then they have more money in each paycheck and then their withholding for 2020 would be on the money, on the, on target. So that's why we really say we should do this Withholding Calculator stuff at the beginning of every year and that's all I got on that one, Aaron.

STEELE: Thank you. I think I got the hang of it. Evette let's see if you can take this question for me. DAVIS: I'll take that. STEELE: You said something about a child who ages out. Can you explain what you mean by that? DAVIS: OK. Yes. Yes. OK. That's another great question, Aaron. So we mentioned that a dependent might age out, which means your dependent will be a year older this year and maybe they are now too old to qualify the parents for some of the tax credits. For example, when your dependent turns age 17, he or she is no longer eligible for the child tax credit. Or when your dependent graduates from college, uh, you're no longer eligible for credit for that dependent or even the education credit. Some other examples could include the Earned Income Tax Credit or the Child Dependent Care Credit.

So specifically, the age of the child is only one of the determining factors when it comes to qualifying for these and other credits. Now, if someone wants to find out more about tax credits for children, they can once again enter the name of that credit in the search box on IRS.gov to do a keyword search. Again, Publication 501 speaks to the qualifications of a child for certain types of credits and, of course, Publication 505 is another really, really good resource. All right, Aaron. That's all I can think of right now. (Laugh) Back to you.

STEELE: That was a lot. Karen, help me with this one. I think this is one where we only received a score of 98 percent. (Laughter) The question is why would someone choose to itemize their deductions on a Schedule A if the standard deduction is a better deal for them? BREHMER: OK. I'm glad someone asked that question. We mentioned that very briefly in passing and it probably deserves a little bit longer answer. Most of the time, you get to decide if you want to take the standard deduction or itemized deduction and most of the time you pick the one that's higher because that benefits you on your taxes. You'll pay less taxes by picking the higher one of those two. The only exception to that is if a couple, a married couple is filing married, filing separate and one of the spouses chooses to itemize, probably because the itemized deductions are higher for that spouse, then the other spouse is required to itemize also. Even if, for the second spouse, the itemized deductions are less than their standard deduction. That's the only example I can think of where you would choose to or have to use itemized deductions even if they're less than your standard deduction. Well, that's the answer for that one, Aaron. STEELE: OK. Good answer. Evette, see if you can help me with this military pension question. DAVIS: (Laughter) OK. STEELE: Here's the way the question reads. Did you say you can enter a military pension or other pensions as though it was a job in the Withholding Calculator? DAVIS: (Laughter) Yes. Good question, Aaron. So, I know that sounds kind of strange, but the answer is yes. In the Withholding Calculator page two, you would enter military retirement as well as any taxable pension as though it was a job. Now, on your tax return, pension income would have uh its own line, to, so that you can specifically report it, OK? But with the Withholding Calculator, you would enter it like it's a job and this is just so that you can figure out more accurately how much you would need to have withheld. Now, just as a reminder, if you have Social Security income, that is taxed a little different, OK? So sometimes part of your Social Security income is taxable and sometimes none of it is taxable.

The Withholding Calculator is not able to figure out how much of your Social Security is taxable or not. Therefore, when you have Social Security income, we suggest you use our handy dandy Publication 505 or, if you have one, talk to your tax preparer who can help you figure this out. OK, Aaron. That's all I got. Back to you. STEELE: Thanks, Evette. That's all the time we have for questions. Evette, before we close the Q&A session, what are the most important points you want the attendees to remember from today's webinar? DAVIS: Yes. Thanks for this opportunity, Aaron. That Q&A went by so fast. So, there are a few key points that Karen and I want to make. All employees should do a paycheck checkup to ensure that they are having enough taxes withheld from their pay. Doing a paycheck checkup is especially important for two family, two income families, people who have two or more jobs or someone who only works for part of the year, people who have children who claim credits like the Child Tax Credit, people with older dependents including children aged 17 or older, people who itemize their deductions, people with high incomes and more complex tax returns, people with large tax refunds or large tax bills. So again, as I mentioned before, it seems like everyone needs to do a paycheck checkup. So, do the paycheck checkup now so that your withholding will be in effect for a longer period of time during the year. We're just now in March. And also, if you change your withholding now, make sure to recheck your withholding in the early part of 2020 at minimum, at least one time, OK? Finally, remember, some taxpayers, like self-employed individuals, should use the IRS Publication 505 to figure their withholding. OK, Aaron. That's all I've got. Back to you. STEELE: Thanks, Evette. If you attended today's web conference for at least 50 minutes after the official start time, you will receive a certificate of completion that you can use with your credentialing organization for possible CPE credit. If you're eligible for continued education from the IRS and registered with your valid PTIN, your credit will be posted in your PTIN account. And if you're eligible for continued education from the California Tax Education Council, your credit will be posted to your CTEC account as well.

Also, if you're registered through the Florida Institute of CPAs, your participation information will be provided to them for earning your CPA CPE. If you qualify and have not received your certificate and/or credit by May 2nd, please e-mail us at CL.SL.Web.Conference.Team@IRS.gov. This e-mail address is shown on the slide too. Your copy of the PowerPoint may have an incorrect date for when you will receive your certificate or credit. The correct date is May 2nd. Our continued education lead wants you to know that we welcome your participation in our web conferences. However, when we offer a topic more than once, you can only earn a certificate and related CE credit for one of the two web conferences.

You will not be able to earn credit twice by viewing the web conference again. If you're interested in finding out who your local stakeholder liaison is you may send us an e-mail using the address shown on this slide and we'll send you that information. As part of the services effort to provide you with more timely topics and interesting features, we'd appreciate if you would take a few minutes to complete a short evaluation before you exit. If you'd like to have more sessions like this one, let us know. If you have thoughts on how we can make them better, please let us know that as well. If you have any requests for future web conference topics or pertinent information you'd like to see in an IRS fact sheet, tax tip or an FAQ on IRS.gov, please include your suggestions in the comments section of the survey. Click the survey button on the left side of your screen to begin. If it doesn't come up, check to make sure you disabled your pop-up blocker. We hope you look to your Stakeholder Liaison for more information about policies, practice, and procedures the IRS uses to ensure compliance with the tax laws. We did not talk about our Issue Management Resolution System. However, we want you to know that we evaluate issues that significantly affect tax administration using this platform. We are planning additional web conferences throughout the rest of the year. To register for any upcoming IRS web conference, please visit IRS.gov using the keyword "webinar" and select Webinar For Tax Practitioners or Webinars For Small Businesses and yes, we'll be offering certificates and CE credit for upcoming web, web conferences. It has been a pleasure to be here with you and on behalf of the Internal Revenue Service, Karen and Evette, I would like to thank you for attending today's web conference. It's important for the IRS to stay connected with the tax professional community, industry association, federal, state, local government organization and individual tax payers. You make our job a lot easier by sharing the information that allows for proper tax reporting. Thanks again for your time and attendance. Much success in your business or practice. Feel free to exit the web conference at this time.