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Monday, March 5, 2018

IRS Releases Updated Withholding Calculator to Help Taxpayers Review Withholding for New Tax Law Changes

The IRS has released an updated Withholding Calculator on the IRS website. The updated calculator will allow taxpayers to see how the tax law changes contained in the Tax Cuts and Jobs Act affect their 2018 withholding on their wages.

The IRS is encouraging employees to use the Withholding Calculator to do a quick “paycheck checkup” to help protect against having too little tax withheld and facing an unexpected tax bill or penalty when they file their 2018 federal return in 2019.

The IRS also released the 2018 Form W-4 (Employee’s Allowance Certificate) which now takes into account the increase in the standard deduction, removing the personal exemptions, increasing the child tax credit, the change in tax rates and brackets and the limiting or elimination of certain itemized deductions.

The Withholding Calculator gives taxpayers who earn wages the information that they need to determine if they may need to make a change in the amount of federal income tax that is withheld from their 2018 wages. If the taxpayer determines that they need to make a change then they should complete a new Form W-4 and submit it to their employer.


For more details see IRS news release IR-2018-36 (Updated Withholding Calculator, Form W-4 Released) on the IRS website.

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