You May Need to Update Your W-4 for 2018
Experts advise workers to check their salaries this month as changes to the new tax bill are expected to take effect.
Since the bill changed tax categories and rates starting in tax year 2018, you will likely see a different amount of wages received (the US Treasury estimates that 90 percent of salaried workers will see a wage increase). The standard deduction will nearly double to $ 12,000 for individuals and couples filing separately, to $ 18,000 for the head of household, and $ 24,000 for married couples filing together.
And when combined with a few other changes, this all means that you may be withholding too much from your paycheck or, in some cases, incomplete withholding. For example, you may claim a large number of dependents benefits that are excluded from the bill. (Note: The new rates / brackets do not affect the taxes you are filing right now.)
According to CNN Money , the IRS says it will publish a new online calculator by the end of February to help you adjust your benefits. If you’re starting a new job today, or just want to figure it out on your own, you can use Worksheet W-4 – you’ll need your latest pay slip and 2017 tax return to figure this out. USA Today reports that the IRS is working on updating the W-4 forms based on the new code, and that “[m] any workers will likely need to complete updated forms for 2019.”
If you need to make changes to the withholding, you can contact Payroll to adjust your W-4 (you don’t need to do this right away, but CNN Money recommends doing this by mid-year) so you don’t get hung up on a large tax bill or huge compensation, and excessively meager salaries throughout the year.