New Tax Law Could Bring Bigger Paychecks

New Tax Law Could Bring Bigger Paychecks

According to the IRS, about 90 percent of people will see more take-home pay.

As a reminder, given recent changes to the accounting rules for equity compensation, it is possible for employers to use a withholding rate higher than the minimum statutory rate for net share withholding to satisfy the tax withholding obligations arising under an equity award, so long as the withholding rate does not exceed the highest rate in the jurisdiction applicable to the employee. "We've constructed the tables so that most people should be accurately withheld if they leave their W-4 in place", a senior IRS official noted. Employees do not have to do anything at this time.

"I think most people will make out at varying levels".

The new law makes a number of changes for 2018 that affect individual taxpayers. The updated tables also include new information pertaining to the increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets.

"The updated tables are now here and for Paychex Flex clients submitting payroll today, those payrolls will be processed using the new withholdings", says Martin Mucci, president and CEO of Paychex.

The IRS update was made to Paychex Flex, the company's HCM platform that provides online payroll operations with tax withholding functionality. The IRS anticipates this calculator should be available by the end of February.

"We would encourage every taxpayer to run their information through the calculator".

During 2017, the IRS saw a rise in the W-2 scam, or more formally known as a business email compromise (BEC).

"The child tax credit has increased to $2,000 dollars per child up from $1,000", said Payton.

The new tables are designed not only to best approximate the change in workers' tax liability under the new law, but to do so in a way that "delivers benefits as soon as possible to as many people as possible with as little disruption as possible", a senior Treasury official told reporters.

In addition, the IRS will help educate taxpayers about the new withholding guidelines and the calculator.

For 2019, the IRS anticipates making further changes involving withholding.

That's not bad advice for any year when there are big tax changes but it's especially critical this year.

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