IRS Withholding Tables change for 2018

The new IRS withholding tables were needed to reflect the changes in tax rates and tax brackets, increased standard deduction and repeal of personal exemptions that were included in the new tax reform law signed in December. According to the IRS, the new tables should result in the correct amount of tax withholding; ideally, not too much and not too little. However, it’s possible that with the new tables, you may need to change your Form W-4. The IRS is revising the Form W-4, though a release date is not yet available. The withholding guidance is for employers to make changes to their payroll systems and is designed to work with existing W-4s that employees have on file.

Employees should begin to see withholding changes in their checks in February. The exact timing depends on when their employer can make the change and how often they are paid. It typically takes payroll providers and employers about a month to update withholding changes on their systems. Payroll changes required each year are made by employers and their payroll providers, so employees are not required to take any extra steps.  However, employees should review their withholding to make sure that it is accurate.

If you have any questions regarding the change in the IRS withholding tables, please contact our office.

 

Westbrook CPA