IRS Publishes 2018 Withholding Tables

Lloyd Doyle
January 13, 2018

They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables, the IRS advised. The new tables reflect the increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets. Workers will see changes in their February paychecks once employers adopt the new guidance, the news release said. 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.

Treasury Secretary Steven Mnuchin at the White House press briefing on Thursday dismissed suspicions that administration is "juicing" the tables as a "ridiculous charge".

The new guidelines incorporate lower tax rates that were central to Congress's December tax overhaul.

The goal of the new withholding tables is to help workers avoid a situation where they're either having too much or too little taken out of their checks each time they get paid.

And roughly three-quarters of tax filers are overwithheld because they take too few allowances. The IRS notes that the tables are created to produce the correct amount of tax withholding for those with more straightforward situations. Ron Wyden, the top Democrat on the Senate Finance Committee, said in a statement. "I look forward to GAO's independent review of these tables, which will expose whether the Trump administration is tampering with Americans' paychecks, resulting in a whopping tax bill next year". There are significant limitations on long-cherished deductions, such as the federal deduction for state income, property and sales taxes.

U.S. Rep Mike Johnson released a statement on January 11, the day the Treasury Department announced the news that likely will increase the amount of money a number of American workers take home each paycheck, starting as early as February.

"Such a calculator will ask for anonymous inputs - for example, your income, number of dependents and other pieces of information that help determine whether you might be eligible for various tax breaks", CNN Money noted.

Employers must now rush to incorporate the new tax withholding tables into their payroll systems, a process that is expected to take several weeks.

Nonpartisan tax experts project that the law will bring lower taxes for the great majority of Americans, though not all.

Other reports by Iphone Fresh

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