Hello Fellow Taxpayers,
The Tax Cuts and Jobs Act made major changes to the tax law. Because of this, you should do a paycheck checkup using the Withholding Calculator on IRS.gov and, if necessary, complete a new W-4 form. The calculator will help determine the right amount of withholding and can help prevent having too little (or too much) tax withheld.
Recent changes affecting withholding include:
- Reduced tax rates
- Elimination of personal exemptions
- Increased standard deductions: $12,000 for singles, $18,000 for heads of households and $24,000 for married couples filing jointly
- Increased child tax credit: $2,000 per qualifying child and a new $500 credit for other qualifying dependents
- Changes to itemized deductions
A paycheck checkup is especially important if you or your employees:
- Are a two-income family
- Have two or more jobs at the same time or who only work part of the year
- Claim credits like the child tax credit
- Have dependents age 17 or older
- Itemized deductions in 2017
- Have high income or a complex tax return
- Have a large tax refund or tax bill for 2017
For more information, please see IRS.gov/taxreform. For updated withholding tables, please visit the IRS newsroom and the IRS withholding table FAQs. I hope this information helps you stay in compliance and maybe not get a big surprise come next April.
On a side note, if you or a friend, neighbor or co-worker has not filed their returns and need an extension filed, with or without money (we can file that electronically too), have them give us a call before the weekend. We are filing loads of extensions now.
Don’t have FOP (Fear of Paying) to go along with the FOF (Fear of Filing). The penalties and interest can be plentiful.
So until next week
Jeffrey “The Payroll Guru” Schneider