Tax Tables For Promised Bigger Employee Paychecks Released
The new guidelines for how much employers should withhold as taxes from workers’ pay have been released by the Internal Revenue Service (IRS). The new plan overhauls the tax code and cuts corporate tax rates. It includes a permanent cut to the corporate tax rate, dropping it from 35 percent to 21 percent. Pass-through businesses also would receive significant cuts.
Businesses across the country must adopt the changes by February 15, according to the Washington Post. That means, according to the IRS, employees could start seeing the changes reflected in their paychecks next month.
The new guidelines adjust how much income tax must be taken out from employee paychecks after taking into account exemptions claimed on IRS Form W-4.
Individual taxpayers don't need to make any changes to their Form W-4 yet. But the IRS expects that many taxpayers will have to do so later this year, when the agency releases a revised version of the form, the article said.
A new tax withholding calculator is expected to be added to the IRS website late next month to help individuals determine the correct withholding amounts.
Reduced tax rates don’t necessarily mean a lower tax bill for 2018, according to the Post article. There are limitations on the federal deduction for state income, property and sales taxes. While there are some new tax credits, others — like the $4,050 personal exemption — have been eliminated.
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