Changes to the tax code will begin to affect tax payers this year.
Tax Cuts and Jobs Act
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. As a result of this tax reform, employers will need to change the amount of taxes they are withholding from their employees’ paychecks. The amount of tax an employer should withhold is dependent upon an employee’s wages, marital status, and allowances.
On January 9, 2018, the Internal Revenue Service (IRS) issued Notice 1036, which outlines the new withholding tables. Employers must begin using these new tables no later than February 15, 2018. This Notice also includes information about Social Security and Medicare rates for 2018.
The IRS expects to issue additional guidance relevant to this new reform law and employers should continue to watch for such guidance.
Forms W-4 already on file are still acceptable and employers do not need to obtain new forms from employees at this time. Newly hired employees should also use the existing 2017 W-4. However, the IRS has indicated that it intends to revise the form for 2019. At that time, new forms will be required.
Employees who wish to adjust their withholds based on the new law can expect to find a calculator available from the IRS by the end of February. The calculator will address other changes to the law including those to itemized deductions, child tax credit, dependent credit, and dependent exemptions.
For a more in depth look at this topic, click HERE to review a Compliance Bulletin created by our content partner, Zywave.
All insurance policies are different. Be sure to review your insurance policy for specific information about coverages available to you. Nothing in this post is meant to suggest a guarantee of coverage.