IRS Announces Withholding Tax Changes for 2018

IRS Announces Withholding Tax Changes for 2018: Employers and Employees Should Review Their W-4 Forms During “Tax Season”

By Yale Yechiel N. Robinson

The Massachusetts Tax Alert™

The Internal Revenue Service (IRS) announced on February 28, 2018 that it has updated its online withholding calculator and the W-4 form to comply with the new tax rates under the Tax Cuts and Jobs Act of 2017.  Most employers have already adopted the new tax withholding tables for their employees’ wages based on the revised IRS Notice 1036.

Employees Should Use the Withholding Calculator

Most employers and employees can simply rely on their payroll service to calculate the new withholding rates based on old W-4 forms that already exist in the employer’s payroll system.  However, the IRS recommends (and I agree) that employees should use the withholding calculator to ensure that the right amount of tax is being withheld from their paycheck.  In addition, employers should use the new W-4 form (see hyperlink above) for employees who need to change their withholding rates and for newly hired employees.

The IRS suggests that employees should obtain a recent pay stub along with their most recent income tax return from tax year 2017 or 2016.  The taxpayer will enter information from the pay stub and the tax return into the IRS withholding calculator (see hyperlink above).

M. Robinson Tax Law

Our mission at M. Robinson Tax Law includes tax planning, tax compliance and tax dispute resolution for high net worth individuals and smaller businesses.  As a service to the community, we also educate taxpayers and tax practitioners by posting articles (such as this blog) and by hosting seminars and webinars for tax professionals.

M. Robinson Tax Law is located in Boston, Massachusetts. Our attorneys work with clients from many U.S. states and foreign countries. Please call us at +1-617-428-6900 to begin a free confidential consultation.

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