Changes in the Tax Cuts and Jobs Act, which took effect in 2018, means employees could be surprised to find their withholding does not offset income taxes this year.
Alternatively, some employees may find they have withheld more than needed. SHRM talks to OneDigital’s VP of Legal Counsel Erica Cordova Zinkie and ERISA Attorney Samantha Malovrh about the importance of conducting a paycheck review when preparing for tax season in the article “At Tax Time, Urge Review of Paycheck Withholding and Retirement Savings.” They recommend using the IRS online withholding calculator as a means to determine their current situation and assess how they want to withhold next year.
This is especially helpful if there have been changes in household incomes, such as getting married, having a child or even a new promotion.
— Samantha Malovrh, ERISA Attorney, OneDigital
Another aspect employees need to be mindful of is that their eligible benefit elections were taken on a pretax basis.
If an error occurred with the pre- or post-tax status of the benefit elections, employees may face a higher tax liability when completing their tax returns."
— Erica Cordova Zinkie, VP Legal Counsel, OneDigital
To read the article in its entirety, click here.
To speak with an expert about communicating tax withholding information to your employees, or for ways to incorporate financial education into your benefits offerings, reach out to your OneDigital consultant.