"The Treasury Department and IRS released new withholding guidance that will implement the tax cut and jobs act".
The Internal Revenue Service published the new income-tax withholding tables to conform to the sweeping $1.5 trillion tax overhaul, the first major rewrite of the tax code in three decades, which became law last month and took effect Jan 1. "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. Employers will have until February 15 to incorporate the changes in their payroll systems. With these new guidelines, companies can start adjusting employee paychecks.
Revisions to the so-called withholding tables incorporate changes from the new tax law.
U.S. Rep Mike Johnson released a statement on January 11, the day the Treasury Department announced the news that likely will increase the amount of money a number of American workers take home each paycheck, starting as early as February.
Individual taxpayers aren't required to make any changes to their Form W-4 right now. The IRS will work with the business and payroll community to encourage workers to file new Forms W-4 next year and share information on changes in the new tax law that impact withholding.
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In the meantime, he urged filers who have complicated tax situations - i.e., anyone who is not single, childless and holding down just one job - to review the number of allowances they now take on their W4s once the IRS puts out its new withholding calculator by the end of February.
Nonpartisan tax experts project that the law will bring lower taxes for the great majority of Americans, though not all.
The analysis predicted the bill would generate a 2.9-percent growth rate, as projected in Trump's fiscal 2018 budget, compared to previous projections of 2.2 percent growth in gross domestic product.
Mnuchin addressed the possible government shutdown, the debt ceiling, and the new tax law during a talk at the Economic Club of Washington DC. The standard deduction is doubled, to $24,000 for couples, but that means it no longer makes sense for many people to itemize and claim other deductions.
Mnuchin said the Treasury was talking to Congress about additional funding to aid implementation of the tax plan, which cuts rates for businesses and many individuals but significantly pares back deductions such as those for state and local taxes and mortgage interest. Taxpayers won't file their 2018 returns until next year, following normal procedure.