economy
Bessent says to adjust your paycheck withholding
Treasury Secretary Scott Bessent told workers to update their paycheck withholding. But mistakes could trigger a tax bill next season.
TL;DR
- Treasury Secretary Scott Bessent urged workers to change their paycheck withholding for 2026 for an immediate wage increase.
- Some tax experts criticize this advice, warning that mistakes in withholding can lead to owing taxes.
- President Trump's tax bill included new deductions for 2025, contributing to higher average tax refunds this season.
- Certified financial planner John Nowak advises using the IRS tax withholding estimator to avoid haphazard changes.
- Tommy Lucas suggests reviewing the 'total tax' on the 2025 tax return to estimate 2026 federal tax liability per paycheck.
- Adjustments to withholding should consider changes in income, marital status, and children.