Beware You May Owe Taxes!

Posted by on Dec 11, 2018

Beware You May Owe Taxes!

Beware You May Owe Taxes!

 

Did you see a bump in your net paycheck in February this year? The new tax laws aimed to lower taxes. However, not everybody will see lower taxes. Some will remain similar or higher.

At a recent tax seminar, I attended, underpayment of taxes is a potential issue for 2018. The tax law was passed in December of 2017. The new withholding tables were issued the first of February 2018. It is these new withholding tables that resulted in people seeing a bump in their net paycheck.

The withholding tables have seen further refinement with more clarity on the new tax laws. You may find you owe Uncle Sam.  It is late in the year to adjust your withholding to compensate for the last year.

But be prepared for a tax bill come April 15th. Look at your tax bill for 2017 and compare it to your current withholding statement. You might want to earmark that difference for 2018 taxes – if you need it. If you don’t- celebrate! If you do, adjust your W-4 for 2019.

Unfortunately, the Idaho State Tax Commission indicated their withholding tables do not withhold enough. Again, look at last year’s state tax bill and compare to your current withholding.

With the state you can still reduce your tax bill with donations to non-profits that create a credit for your Idaho taxes. (Itemizing isn’t required to receive these credits.)

Organizations that provide rehabilitative and youth services receive a credit equal to 50% of your contribution up to a maximum. A single individual can contribute $200 for $100 credit. Married couple is a $400 donation to receive a $200 credit. Rehabilitative and youth organizations are ones like Idaho Youth Ranch, Women and Children’s Alliance, ARC, Hope House and others*

Educational organizations also qualify for credits on Idaho’s tax return. Educational organizations include schools, libraries, museums and several more options found in Form 39R instructions. * The credit is maxed out at $500 for singles and $1000 for married couples. A little due diligence today may prevent an unpleasant surprise come April 15th next year.

 

*(link for complete list of approved organizations:  https://tax.idaho.gov/forms/EIN00046_10-30-2017.pdf )

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