In early 2018, the IRS took the first step to reflect the Tax Cuts and Job Act by releasing the new withholding tables. PeopleGuru implemented the 2018 Withholding Calculations immediately following the release that reflected in payroll as early as Saturday, January 13, 2018.
On February 28, 2018, the Internal Revenue Service (IRS) took the next step to comply with the new tax law by releasing a new Form W-4, Employee’s Withholding Allowance Certificate, and an updated Withholding Calculator.
The new withholding changes do not affect 2017 tax returns due in April, but employees are strongly encouraged to complete the new Form W-4 and take advantage of the Withholding Calculator as a way to help manage their 2018 tax withholding. The IRS is not requiring all employees to file a new Form W-4 for 2018.
Time for a “Paycheck Checkup”
The IRS is promoting the idea for employees to conduct a “paycheck checkup” with the Withholding Calculator to help determine the correct number of withholding allowances. Those with more complex financial situations or that want to adjust their withholding allowances for 2018 may need to alter their W-4.
It is strongly suggested that the following groups check their withholding:
- Two-income families
- People with two or more jobs at the same time
- People who only work for part of the year
- People with children who claim credits such as the Child Tax Credit
- People who itemized deductions in 2017
- People with high incomes and more complex tax returns
The IRS plans to release Publication 505, Tax Withholding and Estimated Tax, in early spring to help taxpayers with more complicated situations comply with the new tax law.
This blog was written by Ally Edwards, Marketing Guru at PeopleGuru. This post may not be copied or published without PeopleGuru's express written permission.