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Celebrate Labor Day by ensuring your payroll withholding is right

Boss-and-employees

Labor Day is a time to celebrate and honor workers. This year commemoration is the 125th anniversary of the day being recognized as a national holiday.

This holiday, now officially the first Monday of September, began as a creation of the labor movement. It was looking for a way to highlight the social and economic achievements of American workers.

"It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity and well-being of our country," according to the U.S. Department of Labor's (DOL) history of Labor Day.

The Labor Department elaborates on the holiday's development:

The first governmental recognition came through municipal ordinances passed in 1885 and 1886. From these, a movement developed to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 21, 1887. During 1887 four more states — Colorado, Massachusetts, New Jersey, and New York — created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 more states had adopted the holiday, and on June 28, 1894, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.

Where the workers are: For this Labor Day, the U.S. Census Bureau sorted through stats from the 2017 American Community Survey and created the graphic below showing how many workers are in selected occupations.

Working for a LivingSource: U.S. Census Bureau

The U.S. unemployment holding at 3.7 percent, with the DOL's Bureau of Labor Statistics' (BLS) August report cited notable job gains in professional and technical services, health care, social assistance and financial activities.

However, the BLS also announced last week that the U.S. economy had about 501,000 fewer jobs as of March 2019 than it initially calculated. That's the largest revision since the waning stages of the Great Recession in 2009.

Getting payroll withholding right: Whatever your job, Uncle Sam and his tax collector salute you.

Your taxable earnings and subsequent spending are keeping our economy running. So you definitely want to make sure you get as much from your paycheck as possible.

You also want to make sure that the portion that goes to the U.S. Treasury is correct.

This Labor Day is a good time to look at your paycheck withholding to see if you need to make some changes. That could be the case if you were among those taxpayers who this filing season, the first under the new Tax Cuts and Jobs Act (TCJA) changes, were unpleasantly surprised by the amount of your expected refund.

The best way to prevent that from happening next year is to use the IRS' new paycheck withholding estimator. That will tell you what to enter in the new Form W-4 you'll file with your payroll office.

But do those calculations tomorrow. Today, enjoy your holiday!

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