Starting this month, you could see more money in your paycheck!
It's a result of President Trump's tax cut. But there a few things you need to watch out for, to make sure you don't end up making more now, but owing Uncle Sam later.
The tax cuts mean everyone will see some sort of increase in their paychecks starting around February.
It could be as little as $10 for people making less than $10,000 a year, to $1,300 for people making between $75,000 to $100,00.
But here is the problem: you may end up with too much money in your paycheck, meaning you'll be stuck paying it back at tax time next year or get a smaller refund.
"It's going to be a huge difference and its yet to pan out because withholding tax tables were just released," says tax attorney Robert Fedor.
So how do you make sure your paycheck is correct? Well, the IRS has a withholding calculator to get as accurate as possible... although they haven't updated it yet for the new plan.
Then revisit that W-4 form with your employer. That's the paperwork you fill out when you get a new job to calculate how much they take out... you usually put a 0 or a 1
"For most people we're just saying wait to see what happens after a few pay checks, and then you can predict what your withholding will be after you see a couple paychecks, " says CPA Todd Koch.
Now even though getting a refund is exciting, some say you should have less money taken out and not get one, otherwise you're basically making an interest free loan to the government.
Your best bet, check with a tax professional. And there are free prep services out there depending on your income. Information is below here.
