Lower taxes mean bigger paychecks for most Americans come February | 2018-01-11

Lower taxes mean bigger paychecks for most Americans come February | 2018-01-11

Americans will soon see bigger checks on payday as the Internal Revenue Service releases updated 2018 federal income tax withholding tables, reflecting the changes that come after the Trump administration signed its Tax Cuts and Jobs Act into law.

Employers are instructed that they should implement the 2018 withholding tables as soon as possible, but no later than February 15.

In a statement, the IRS said that many employees will begin to see increases in their paychecks to reflect the new law in February. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid — generally weekly, biweekly or monthly.

“The IRS appreciates the help from the payroll community working with us on these important changes,” said Acting IRS Commissioner David Kautter. “Payroll withholding can be complicated, and the needs of taxpayers vary based on their personal financial situation. In the weeks ahead, the IRS will be providing more information to help people understand and review these changes.”

But Americans need to keep a watchful eye on their pay stubs, according to Trump administration officials, as reported by the Washington Post’s Damian Paletta. Paletta reports that millions of Americans will need to use a new online calculator from the IRS to double check their paychecks for accuracy when the tool is released ‘sometime next month.’

From the article:

A senior IRS official said Thursday that Americans with simple tax situations are likely to get accurate paychecks next month. But many Americans, including those who tend to itemize their tax returns, will need to use the online tool to ensure they are not dramatically overpaying or underpaying their taxes. The online calculator will not be available until sometime next month.

If they find their paychecks are inaccurate, it will be incumbent on the employees to tell their employers to make corrections.

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