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Local workers consider W-4 adjustment in the wake of new tax plan

UTICA, N.Y.-- At the end of the month, the Internal Revenue Service will release a new calculator tool to make sure wage earners aren't surprised at the end of the 2018 tax season.

Posted: Feb. 19, 2018 7:08 PM
Updated: Feb. 19, 2018 10:19 PM

UTICA, N.Y.-- At the end of the month, the Internal Revenue Service will release a new calculator tool to make sure wage earners aren't surprised at the end of the 2018 tax season.

Because the new federal tax plan withholds less money from each paycheck, workers could end up with a smaller annual refund or could owe money to the IRS in April of 2019.

Upon hiring, workers fill out a W-4 form with their company's payroll department, informing the government how much they'd like withheld from their paycheck.

With more workers now opting for the standard deduction and more exemptions no longer available, employees who receive more money in their paycheck each week may not be prepared to see a smaller refund at the end of the year.

The process is complicated, and the owner of Bagel Grove in Utica wants to help her employees understand their finances.

"If you're someone that has very few claims on their W-4, less is withheld with these new codes than they may want," Annie Wadsworth, owner of Bagel Grove said. 

She held a seminar for her employees Monday to explain the changes they may have to make.

"To show people the calculation for the new withholding tables," Wadsworth said. "If you're okay with just, the payroll takes out what they take out, see what happens, that's fine. If you want to dig more into it, I'm going to give as much information as I can to be able to do that and make an educated decision."

Wadsworth said information about the changes has been difficult to find.

"Language that we're not familiar with, it's all-new," Wadsworth said. "The IRS website has very little information and I want to make sure people aren't surprised. I want to make sure people aren't spending all their money now, and then they don't have their refund that they are used to."

One of her employees is planning to continue claiming "0" throughout the year, meaning the largest amount of money possible will be withheld from her paycheck.

"With this big check I get at the end of the year, it's kind of just for extra stuff," Julie Quinn, a production manager said. "If I didn't have it, it would not be fun, but it wouldn't really hurt me in the long run because I'm not using it to catch up on things."

For those who fear they might not get the refund they're used to, a local tax preparer said adjusting your W-4 to "0" might be the best option.

"If in doubt, claim zero, because that takes the most money out of your paycheck and you get it back at the end of the year," Rick Reynolds, a professional tax preparer said.

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