Doing a ‘Paycheck Checkup’ is a good idea for workers with multiple jobs

The Internal Revenue Service urges taxpayers who work multiple jobs or who may be adding summer employment to complete a Paycheck Checkup. Doing so will help them check if they are having the right amount of tax withheld from their paychecks.

Checking and adjusting tax withholding as early as possible in 2019 is the best way to head off a tax-time surprise next year.

The Tax Cuts and Jobs Act (TCJA) made changes to the tax law. Among other things, the new law increased the standard deduction, eliminated personal exemptions, increased the child tax credit, limited or discontinued certain deductions and changed the tax rates and brackets. As a result, many taxpayers ended up receiving refunds that were larger or smaller than expected, while others unexpectedly owed additional tax when they filed their 2018 tax returns.

Two-income families and people with multiple jobs may be more vulnerable to being under-withheld or over-withheld following these major law changes. For 2019, a Paycheck Checkup is especially important for taxpayers who adjusted their withholding in 2018, specifically in the middle or later parts of the year. Doing a Paycheck Checkup can help determine the correct amount of tax for each of their employers to withhold.

The IRS urges everyone to do a Paycheck Checkup as early in the year as possible so that if an adjustment is needed, there is more time for withholding to happen evenly during the rest of the year. Waiting means there are fewer pay periods to withhold the necessary federal tax.

The easiest way to do a Paycheck Checkup is to use the Withholding Calculator on The Withholding Calculator can help taxpayers estimate their income, credits, adjustments and deductions more accurately and check if they have the right amount of tax withheld for their financial situation. When using the calculator, it’s helpful to have a completed 2018 tax return and a recent pay stub available.

Based on the Withholding Calculator’s recommendations, the taxpayer can then fill out and submit a new Form W-4 to their employer. In many instances, this means claiming fewer withholding allowances or having an extra flat-dollar amount withheld from their pay.


Some workers are considered self-employed and are responsible for paying taxes directly to the IRS. Often, this includes people involved in the sharing economy. One way to pay taxes directly to the IRS is by making estimated tax payments during the year.

TCJA changed the way tax is calculated for most taxpayers, including those with substantial income not subject to withholding. As a result, many taxpayers may need to raise or lower the amount of tax they pay each quarter through the estimated tax system.

The revised estimated tax package, Form 1040-ES, on is designed to help taxpayers figure these payments correctly. The package includes a quick rundown of key tax changes, income tax rate schedules for 2019 and a useful worksheet for figuring the right amount to pay.

Other situations

Anyone who had a life change, such as getting married or divorced, buying a home or having a baby should also consider a Paycheck Checkup.

Pay electronically anytime

Taxpayers can pay their 2019 estimated tax payments electronically anytime before the final due date for the tax year. Most taxpayers make estimated tax payments in equal amounts by the four established due dates. The three remaining due dates for tax year 2019 estimated taxes are June 17, September 16, and the final payment is due January 15, 2020. Direct Pay and EFTPS are both free payments options, and taxpayers can schedule their payment in advance as well as receive email notifications about the payment. Visit to schedule electronic payments online, by phone or the IRS2go mobile app.

Uber Drivers Are Contractors, Not Employees, Labor Board Says

The National Labor Relations Board, handing an important victory to Uber, has concluded that the company’s drivers are contractors, not employees.

The move, outlined by the board’s general counsel in a memorandum released Tuesday, deals a blow to drivers’ efforts to band together to demand higher pay and better working conditions from Uber and its main rival in the ride-hailing business, Lyft.

Contractors lack the protection given to employees under federal law — and enforced by the labor board — for unionizing and other collective activity, such as protesting the policies of employers. As a practical matter, the conclusion makes it extremely difficult for Uber drivers to form a union.

The board’s general counsel, an appointee of President Trump, does not have purview over other laws applying to employees, such as minimum wage and overtime protections.

Still, had the board found that drivers were employees rather than contractors, it could have put pressure on the regulators who enforce such laws to reach the same conclusion.

If companies like Uber and Lyft were forced by regulators or courts to treat drivers as employees, it would probably raise their labor costs by 20 to 30 percent, according to industry estimates. Both companies have seen their stock prices fall after recent public offerings amid questions about their financial prospects.

The memo follows an opinion last month by the Labor Department arguing that workers at an unnamed company with a business model like Uber’s were contractors, not employees.

In both cases, the conclusions reversed the approach adopted by the Obama administration, which had suggested that people who find work through apps in the so-called gig economy were likely to be considered employees. In 2016, the labor board issued a complaint against Postmates, a delivery service, over allegations that the company had interfered with workers’ ability to exercise their labor rights.

The agency could not have issued that complaint without first concluding that Postmates couriers were employees.

The memo released on Tuesday, which was dated April 16, has no long-term value as a precedent and can be reversed by a future general counsel. Its immediate consequence is to render moot three formal accusations, filed in different parts of the country, that Uber had violated federal labor law. The memo instructs the board’s regional offices to dismiss the charges if the people who made them don’t withdraw them first.

Contractors vs Employees

Financial Literacy

We all spend money, but how many of us really know how to properly manage our money? This skill – or the lack of it – is referred to as “financial literacy” in the same manner as “literacy” gauges how well a person can read. A lot of people might say they are not very literate when it comes to finances. Financial literacy is defined as the ability to understand how money works. But this simple definition has broad ramifications. For instance, how well do consumers resist temptation to spend more than they earn? Have they invested in themselves, their family or charities? To have an impressive amount of financial literacy, it seems best to do things that are not exciting, at least initially. Be frugal. Prepare. Track your spending. Legendary businessman Warren Buffett is considered a genius at investing, yet his approach is simple. “You only have to do a very few things right in your life so long as you don’t do too many things wrong,” he said. Buffett is a thrifty guy who always avoided debt and extravagant living and still resides in the home he bought in 1958. As he has done with his housing, he does with stock. He buys and keeps it.