With the implementation of the Tax Cuts & Jobs Act which was passed by Congress in December of 2017, employees may find it valuable to change the exemptions claimed from income tax withholding. The IRS is offering a little reprieve by allowing individuals to use the 2017 Form W-4 to make changes for 2018 until February 28, 2018.
There are 2 important items to remember as employers, employees, and contract laborers receiving 1099’s. The IRS:
- Suspends a requirement that employees must give employers “new W-4’s within 10 days of a change in status resulting in fewer withholding allowances”.
- Requires “treating the payee as married with 3 withholding allowances” if no withholding certificate is in effect.
If you are confused about the number of personal exemptions to claim in 2018, you may look at IRS Notice 1036 released in January containing updated tax withholding tables. Further guidance is to be posted on the IRS website, IRS.gov, including an online tax withholding calculator where employees can doublecheck their withholding for correctness. If you are like me, you don’t want to give the IRS more than you have to, so, check it out.
We have noticed at Stapley Accounting that many employees in Logan and Cache Valley we are servicing for payroll are seeing a fairly substantial decrease to the federal withholding amount being deducted from each paycheck and that is always nice. If you have questions, give us a call. We are always happy to assist you.
Your work hard for your money. Take advantage of resources to available to benefit you. You Can Do It.