The tax withholding tables for employers have been updated, so you may have already noticed a change in your take home pay. To avoid a surprise at tax time next year, use this calculator from the IRS to determine the proper withholdings for 2018.
The Tax Cut and Jobs Act passed in December brought about a myriad of changes in tax law. The most likely affected taxpayers include two-income families, taxpayers with children for which they will claim child tax credits, those that itemized deductions in 2017, particularly in high income tax or real estate tax states, and taxpayers that work two or more jobs or that will work only part-time in 2018.
The calculator released by the IRS is designed to assist taxpayers in determining if they will need to update their Form W-4 for withholding. While no personal identifiable information will need to be entered to use the calculator, taxpayers will need some specific information. We recommend that you have a copy of your (and your spouse’s, if applicable) latest pay stub and your 2017 tax return when you sit down to use the calculator.
Here is a highlight of some of the information you will need to properly use the calculator:
- Estimate of 2018 income
- Frequency of pay
- Amount withheld for taxes to date
- Number of children claimed for the child tax credit (qualified dependents under 17 in 2018)
- Estimated child care expenses
- Anticipated total tax credits
Once you have completed the calculator, visit your Human Resources or Payroll office to update your form W-4, if needed.
If you have any questions that we can help you with based on the new changes with the Tax Cuts and Jobs Act, please feel free to contact us.