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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