Check Withholdings now to make the most of your 2021 tax refund

By  | 

BISMARCK, N.D. - The end of the year is a good time to make sure your set for tax season.

The changes made last year under the Tax Cuts and Jobs Act caught many people off guard.

Brady Martz Shareholder Lance Rambousek says a common mistake was not checking withholding amounts leading into last tax season.

Because of this, people received less in refunds than the year before.. some even owing the government money.

Inside the walls of Brady Martz accountants are answering calls year round on filing taxes.

"A lot of our clients, if they're paying attention to the new tax law tax act, they're calling and asking what we can do, what can we do differently. How can we mitigate our tax impact," said Rambousek.

While there are people who are aware of the changes from the Tax Cuts and Jobs Act, Rambousek says many people were surprised to find they were under withheld in April.

People making close to the same income the year prior, made out with a lower refund or even owed a bill.

Rambousek says revising your withholding amounts could solve this problem going into 2021.

"The new W-4, the big thing it's trying to do is match your withholdings with your gross income or your wages. Obviously, the more you withhold upfront, the less you'll have to pay in at tax day," said Rambousek.

The IRS released its final version of the 2020 Form W-4 earlier this month.

Unless refiled, your current Form W-4 is still being used. Meaning, problems could arise in April unless you adjust your withholding.

"If you continue to use your old W-4, they are indexed for inflation, but you will still likely land with the same situation you had back in 2018 and now 2019 where you are going to be probably short with your withholding," said Rambousek.

Rambousek says a good goal for your withholding is to pay so much each month that you neither owe nor are owed come tax season.

If you need help with your withholding, you can go to https://www.irs.gov/individuals/tax-withholding-estimator to use the new IRS withholding calculator.