(National Sentinel) In the Money: U.S. workers’ paychecks will be fatter starting next month as tax cuts passed under Republicans’ and President Donald J. Trump’s tax reform bill kick in.
In fact, about 90 percent of workers will see more money stay in their accounts and less going to Uncle Sam, according to new guidance and withholding tables for employers issued by the U.S. Treasury and IRS on Thursday.
“Under those new tables, the Treasury estimates that 90 percent of people who get a paycheck are likely to see more in take-home pay, as soon as February,” CNN/Money reported. “Employers will have until Feb. 15 to incorporate the changes in their payroll systems.”
Still, tax experts are advising workers to assess whether the new tables mean that they are having enough taxes withheld so they don’t get stuck with a big tax bill at the end of the year.
The new tables are designed not only to best approximate the change in workers’ tax liability under the new law, but to do so in a way that “delivers benefits as soon as possible to as many people as possible with as little disruption as possible,” a senior Treasury official told reporters.
The major changes affecting individuals include new tax brackets, (mostly) lower income tax rates, a near-doubling of the standard deduction and the elimination of both personal exemptions as well as many itemized deductions.
“We’ve constructed the tables so that most people should be accurately withheld if they leave their W-4 in place,” a senior IRS official noted, adding that the agency won’t be issuing new W-4’s just yet.
The plan is to issue new ones in 2019. Personal exemptions are a feature of the current tax system, but not that they’ve been eliminated, “it’s necessary to build a new approach to withholding, which will take some time,” the senior IRS official said.
He added that any workers who are in more complicated tax situations, such as anyone who is not single, childless and holding down just one job, to run their earnings through the IRS’ new tax calculator, which is scheduled for release next month.
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