Check the New IRS Tax Withholding Estimator Now So You Aren’t In Trouble Come April 2020

tax withholding

Tax time is a funny time of year. Some people are really excited when April rolls around. That’s because they get a lot of tax withholding money taken out of their paychecks throughout the year. Therefore, after filing their taxes, they get a nice big refund.

On the other hand, if you’re the type who tends to owe money, then tax time is no fun at all. One of the best ways to avoid the dread of this season is to act in advance. If you make sure that you’re withholding enough from your paycheck throughout the year, then you don’t have to stress about tax time in April.

The IRS has released a new tool that can help.

New IRS Tax Withholding Estimator

The IRS has always offered a tax withholding calculator. However, there were a lot of changes to taxes last year. Therefore, they felt that it was an important time to update. They’ve released a new tax withholding estimator that takes into account all of the latest tax rules.

You can use the tool to enter some basic information about your paycheck and current tax withholdings. Before using the tool, you should gather your recent pay stubs and last year’s tax forms. Then you can easily use this information to enter the required details into the withholding estimator.

The tool will also ask you a few basic questions that affect how much you’ll pay in taxes. For example, it will ask how many dependent children you have. The more accurately you answer all of the questions, the better result you’ll get from the estimator.

This tool will tell you how much money you should have withheld from each paycheck. If you follow the advice, then you shouldn’t owe any money come April 2020.

How to Use Information from the Tax Withholding Estimator

The Tax Withholding Estimator will give you a number. That number is the amount that you should have withheld from your taxes. It’s a good guess that should leave you owing nothing come tax time.

You can use this information to your advantage in a few different ways. For example, let’s say that the tool estimates you should have $500 withheld from each paycheck. If you withhold that amount, then you should break even come tax time. Now you can look at how much you’re currently getting withheld and make some choices.

Let’s say that you’re currently getting exactly $500 withheld. You could make the choice to keep things exactly as they are. Alternatively, you could make the choice to increase that slightly. This would cover any unexpected costs that might arise to help guarantee that you don’t owe taxes in April. Plus it might mean that you get some refund money back come tax time.

On the other hand, let’s say that your tax withholding is currently $1000. After the tax laws changed, people didn’t need to pay as much. However, if your taxes were already set up with your employer, perhaps nothing changed. Therefore, you’re paying in much more than you need to. You could keep things as they are and get all of that money back come tax time. On the other hand, you could safely reduce your tax withholding, which would give you more money in each paycheck now.

How will you use the new Tax Withholding Estimator to help you adjust your paycheck?

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Nine Cheap Travel Trips

Cheap travel tips

Cheap travel tips

A vacation doesn’t have to cost you a fortune. If you are a traveler on a budget, these cheap travel tips are for you.

With concerns of rising air fares, baggage fees, cost of gas and more, taking time to travel can seem financially daunting and unrealistic when everyone wants you to save and think about retirement more. The truth is, you can most certainly still travel on a budget.  Here are nine easy cheap travel tips, some of which I use myself:

  1. Travel off-season. This is probably one of the easiest ways to save on your next trip, especially when flying. You will find that the rates are lower right off the bat when you plan to leave when others are typically not. Savings will also be found in rental cars and accommodations. If your trip depends on warm, nice weather, I would recommend comparing and contrasting prices in the fall and spring.
  2. Bring your own food. Are you going on a road trip? Pack your own food to avoid extra spending on stopping at restaurants or fast food joints. Plus, you’ll get to your location faster by saving time. My boyfriend and I often hit a lot of ground when we travel, and our most recent trip was a road trip. We were able to save time and money by bringing our own meals for the road.
  3. Leave during the week. The weekends are unquestionably busiest for traveling, which means higher prices in air fare, car rentals, hotels and the like. By generally choosing to fly out on a Tuesday or Wednesday, you can make your vacation cheap. Always keep major holidays in mind, though, as that does change things.
  4. Opt for a bed and breakfast. When my boyfriend, Ryan, and I decided to travel to Seattle in 2014, we knew this trip would not be cheap, mostly because of both renting a car for a few days and needing to stay in hotels for four of the seven nights of our excursion. Ryan was not too keen on the idea of a hostel (another inexpensive option) due to none with privacy being available, so I began looking into bed and breakfasts. I found a happy-medium, located right by downtown Seattle in the Cultural District, The Panama Hotel. It is technically a hotel but has a bed and breakfast feel. It also holds much history. In fact, it is the only remaining Japanese bathhouse still standing in the United States. We stayed here for the first couple nights at the beginning of our trip, and we were able to save money while also being able to walk through the downtown area. And, speaking of which…
  5. Put on your walking shoes. If you are trying to save as much money as possible on your trip, make a plan to walk as much as possible. Even in the age of the sharing economy with Uber and Lyft, try walking. You can still use that extra $20 for your next meal. Remember: cheap travel is the key here.
  6. Get the biggest bang for your buck. Ryan and I have been able to do multiple trips because we often incorporate the great outdoors in our travels. We will stay a few nights in a major city then head out of town to a national park or outdoor area that interests us, which helps us to keep expenses low while traveling. In addition to be cheaper, it also allows us to experience so much more.
  7. Don’t be afraid to ask for a refund. If you noticed a cheaper deal with another hotel company or car rental after booking, you can cancel your current agreement to go for the lower rate. Just make sure you do it in enough time and read the terms on your receipts. Many hotels allow a 24-hour cancellation notice in order to receive a refund. Others might require a minimum of 48-hours.
  8. Fly out locally. Instead of flying out of a major city’s airport, you may be able to save by flying out through a regional airport. Be sure not to rule it out when doing your price comparisons.
  9. Use an app. I am still learning about all the awesome apps there are you can use to find the best deals along with last-minute reservations. I am sure you are aware of useful tools like Groupon, Airbnb and LivingSocial, but some others include HotelsTonight and Air Help, which helps you with airfare compensation. You can also manage travel points through TPG To Go.

Part of cheap travel is to also know peak times in the areas in which you want to travel. Going with my point listed above, you can expect to spend more on travel costs during the area’s busiest times.

By keeping your budget in check and using these little tricks, you can fit a vacation that not only suits your schedule but your wallet as well.

What would you add to the list?