2018 Federal Income Tax Withholding Changes
Posted: January 4, 2018
The Tax Cuts and Jobs Act has reduced individual income tax rates for 2018. This suggests that employees who withhold federal income tax from each paycheck should be able to reduce the amount of tax that they withhold from each check in 2018. However, the IRS first needs to issue new withholding tables for employers and payroll administrators to use for calculating paycheck deductions.
The IRS recently issued a statement that says they anticipate issuing initial withholding guidance in January, and employers and payroll service providers will be encouraged to implement the changes in February. The IRS emphasized that their guidance will be designed to work with the existing Forms W-4 that employees have already filed, so employees should hopefully not need to complete new Forms W-4.
In the meantime, the IRS has instructed employers and payroll service providers to continue to use 2017 withholding tables and systems.
These upcoming changes to the federal income tax withholding system will not affect withholding for state income taxes or payroll taxes (such as Social Security and Medicare), which remain unchanged.
Schedule an appointment with us today.
Meet with a knowledgeable attorney who specializes in your area of law.
1251 W. Glen Oaks Lane, Mequon, WI 53092
F: (262) 238-6999