In light of the recent tax reform, the IRS recently released updated income tax withholding tables for 2018 that employees and employers should be aware of. To more accurately calculate your withholdings going forward, the IRS created a Withholding Calculator. The calculator helps taxpayers project how the revised withholding tables will affect their paychecks and tax liability, such as the increase in the standard deduction, the elimination of personal exemptions and changes in tax rates and brackets. Use the new Withholding Calculator to estimate your tax liability.
In addition to the new withholding tables, the IRS has revised Form W-4; the form that employees file with their employers to claim withholding allowances. The new W-4 reflects the additional changes in the tax law. At the beginning of 2018, employees were permitted to use the 2017 Form W-4. With the release of the 2018 Form W-4, we strongly suggest filing the new form with your employer. As the IRS continues to make further changes, education will be available to ensure employees are not having too much or too little taken out of their pay. If you have questions on how your company’s employees will be affected by the new withholding guidelines and calculator, contact an Anders advisor.
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