No one likes a surprise tax bill. That’s especially true of employees, who think withholding means everything’s under control. You know better. Now is the time to reach out to everyone, and let them know that they still have time to adjust their 2015 W-4s to take account of any unexpected underwithholding situations.
And don’t forget the new health care information reporting forms. New tax forms are bound to cause employees a great deal of consternation.
Here’s what employees need to know.
Situation No. 1: Changes in itemized deductions/dependents
A very rough rule of thumb is that one withholding allowance could approximate one itemized deduction on a 1040 form. For 2015, the value of one withholding allowance is $4,000. Employees can figure this out by completing the worksheet on the back of the W-4. So employees should estimate their itemized deductions now and see if they jibe with their withholding allowances. If not, e...(register to read more)