The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets. As such, a new version of Form W-4, Employee’s Withholding Allowance Certificate, was released on February 28.
Taxpayers with less complex tax situations–single, married couples with only one job, or those who have no dependents, and who have not claimed itemized deductions, adjustments to income or tax credits–might not need to make any changes to their withholding or revise their Forms W-4.
Taxpayers with more complicated financial situations, however, might need to revise their W-4. Among the groups who should check their withholding are:
To determine whether changes to withholding should be made for 2018, taxpayers should first check the updated IRS Withholding Calculator to make sure they have the right amount of tax taken out of their paychecks. If a taxpayer needs to fill out a new Form W-4, they should do so and then submit the new Form W-4 to their employer.
The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year.
If you have any questions about the amount you should be withholding on Form W-4, please call.
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Copyright All rights Reserved. Financial Dream Team, like all providers of personal financial services is required by law to inform their clients of their policies regarding privacy of client information. The information in this material is not intended as tax or legal advice. Financial Dream Team, USA, LLC is a registered business in Califronia. Provided content is for informational purposes only.