IRS Releases Withholding Guide for 2018 Filing Season
The IRS released a new publication aimed at helping taxpayers determine their withholding amounts for the current filing season following recent tax code changes.
Publication 505, a reference guide that is updated annually, includes instructions for taxpayers to complete Form W-4, Employee's Withholding Allowance Certificate. An updated Form W-4 was released by the IRS on Feb. 28 to reflect changes in the 2017 tax act, including adjusted tax rates and brackets, a higher standard deduction, and repealed personal exemptions.
The IRS encourages taxpayers use the agency's resources, including its online withholding calculator, to determine their new withholding amounts and decide whether to file a new W-4, the agency said in an April 2 news release (IR-2018-80).
“It's important every year for people to review if they're having the right amount of tax withheld from their paychecks,” Acting IRS Commissioner David Kautter said in the release. “This year, it's even more urgent for people to review their situation following the new tax law changes. As people complete their 2017 tax returns, this is a perfect time to take a paycheck checkup.”
The agency also plans to make additional revisions and updates to the Form W-4 and online withholding calculator for the 2019 tax filing season, Ken Corbin, IRS director of return integrity and compliance services, said March 12 at the American Payroll Association's annual Capital Summit. Updates to Form W-4 and its instructions are likely by August or September, he said.
“The problem is that for some taxpayers, their situation is neither simple nor ordinary. No online tax tool, no matter how good, can account for every special situation nor do they protect against user error,” Robert Kerr, executive vice president for the National Association of Enrolled Agents in Washington, told Bloomberg Tax in an April 2 email. “And taxpayers won't know until early 2019 — far too late to address any errors — whether their withholding calculations are correct.”
With assistance from Michael Trimarchi.
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