The new federal income tax law called the “Tax Cuts and Jobs Act”, effective for 2018, has caused the wage tax withholding for most W-2 income employees to be inaccurate. The IRS and tax advisers encourage everyone who receives wages to recalculate the withholding amount, complete a new W-4, and use this to new W-4 form request an adjustment in the amount within the employer’s payroll accounting system.
The brand new IRS withholding calculator is found here.
Those who have income from multiple sources or who are not wage earners can use another method, like tax planning software available when preparing their 2017 tax return, to make new estimates and avoid surprises and under-withholding penalties.
Some taxpayers will benefit from taking an extra step and actually making changes to maximize the savings available under the new law. I am pleased to discuss this with anyone interested in lowering their tax liability.