May 01, 2018
The IRS is urging a “Paycheck Checkup” for several groups of taxpayers. The new tax law could affect how much tax you should have your employer withhold from your paycheck. Among the groups the IRS encourages to review their payroll withholdings are people who:
- Belong to a two-income family
- Work two or more jobs or only work for part of the year
- Have children and claim credits such as the Child Tax Credit
- Have older dependents, including children age 17 or older
- Itemized deductions on their 2017 tax returns
- Earn high incomes and have more complex tax returns.
Major changes in the tax law that could impact withholding include the reduction in individual tax rates, the increase in the standard deduction, the elimination of personal exemptions, the increase in the child tax credit, and the adjustment, both up and down, to many itemized deductions. The IRS issued revised 2018 withholding tables to try to reflect these changes.
The IRS has unveiled a Video (below), Tax Tips and an updated Withholding Calculator to help you determine if a change should be made to your W-4 form to adjust your payroll tax withholdings from your employer. Employees who need to adjust their withholding should do so as quickly as possible so there is more time for tax withholding to take place evenly over the rest of the year.
The accountants at Terry Lockridge & Dunn can assist you in reviewing the impact of the 2018 tax laws on your situation. Please reach out to them at 319-364-2945 in Cedar Rapids or 319-339-4884 in Iowa City.