Updated 2018 Withholding Tables Issued

rascon cpa, the rascon cpa firm, cpa services,accountant, accounting firm, surface transportation act of 2015The IRS has issued updated 2018 withholding tables that reflect the changes made by the Tax Cuts and Jobs Act. The new law makes numerous changes affecting individual taxpayers in 2018. The new tables reflect the increased standard deduction, repeal of personal exemptions and changes in tax rates and brackets. The updated 2018 withholding tables are designed to work with previously filed Forms W-4. Therefore, employees do not need to complete new Forms W-4 now.

Updated 2018 Withholding Tables

The updated tables provide the new withholding rates for employers to use during 2018. Employers should begin using the updated 2018 withholding tables as soon as possible, but no later than February 15, 2018. Employers should continue to use the old withholding tables until they implement the new ones.

Less Withholding

According to the IRS, many employees will see increases in their paychecks under the updated 2018 withholding tables. When employees will begin to see the changes depends on how quickly the new tables are implemented by employers and how often an employee is paid. In addition, the IRS noted that the new tables are designed to produce the correct amount of tax withholding. The revisions are aimed at avoiding over-and under-withholding as much as possible.

Proper Withholding

To help taxpayers determine their proper withholding, the IRS is revising its withholding tax calculator on IRS.gov. The revised calculator should be available by the end of February. The revised calculator will reflect not only the increased standard deduction, repeal of personal exemptions and changes in tax rates and brackets, but also the changes in available itemized deductions, increases in the child tax credit, the new dependent credit and repeal of the dependent exemption.

Finally, the IRS anticipates making further changes involving withholding for 2019. The IRS will work with the business and payroll community to encourage workers to file new Forms W-4 next year and share information on changes in the new tax law that impact withholding.