Are You a Seasonal Worker

Everyone should check their tax withholdings on a fairly regular basis to make sure they are correct. This is especially true for taxpayers who work seasonal jobs or who are only employed for part of the year.  

While that advice is good to follow all the time, it is especially important right now since the Tax Cuts and Jobs Act has enacted tax law changes. These changes involve an increased standard deduction, an increased child tax credit, the elimination of personal exemptions, the elimination of some deductions, and a change in tax brackets.

Since seasonal or part year workers often get a bulk of their money in a short period of time, withholding too much or too little can end up affecting them in a huge way, especially with the new tax laws. For this reason, these employees need to perform a “withholdings checkup” as soon as possible.

They can do this by speaking with human resources at their job, consulting with a professional tax adviser, or by using the withholding calculator, a tool provided by the IRS. The calculator, which can be accessed on IRS.gov, helps people to estimate their income, adjustments, credits, and deductions and, from there, determine the correct withholding amount. The calculator can be used for part year or seasonal employees since it asks specific questions about employment length.

If it turns out, based on your calculations, that you do need to make a withholding change, a visit to human resources will be in order. You will need to fill out a new form W-4 and submit it to your employer. Fortunately, this process is quick, easy, and it can save you a whole lot of trouble and hassle come tax time.