As of this morning’s paycheck, my ginormous employer has started giving us the “benefit” of lower tax withholdings on our paychecks.

You would think this is a good thing, right? Isn’t this the boost to our bottom line that will keep our economy running bigly along as the best economy the world has ever seen, even including those freaky-deaky Romans who thrived on bloodsports, lived for hedonism, and made everything possible through quasi-legal immigrant labor? Of course it is! No comparison!

Just a heads up: If you’re seeing a big, recent benefit from your withholdings, take a close look at the bigger picture of your tax situation. I will actually be paying about the same in taxes under the new plan vs the old. However, many employers are using guidance from payroll companies to change the withholding tables so people start seeing more benefit immediately. If you’re in my situation, this will result in a large and often unexpected tax bill come next spring. Like, in the thousands.

Yes, I know next spring in terms of politicians (and many consumers) is like a decade away, but it’s best to start planning now.

PSA: Go get your employer’s W-4 form and consider changing your withholdings. You don’t even have to do the little worksheet, you just have to fill out “S” or “M” (marital status) and put a number between 0 and 10 for deductions. It doesn’t have to be the truth, it’s just a guideline – there is no legal penalty here for what you write, only for if you don’t have enough withheld. Interestingly, the IRS doesn’t owe you a penalty for over-withholding. Funny how that works!


(Disclosure: I’ve been withholding as M-10 for several years, since our deductions have always been itemized and I will continue to do so. There is no reason at all for my net pay to have gone up, so their algorithm is way off.)

/rant off