The amount of withholding tax is determined by how an employee fills out their W-4, the Internal Revenue Service (IRS) form. Employee’s are required to fill out this form when they are hired to a new place of employment. This form is then submitted to the government in order to determine how much will be withheld from an employee’s paycheck. Employers are now updating their systems to reflect the new changes to the tax code to work in conjunction with the existing W-4 forms.
Beginning in February many of the new withholding rates will change to reflect the passage of the new tax reform bill. To see the new withholding tables, click here to view the new tax rates tables. In addition, new W-4 forms will be revised to reflect the changes in the tax rates made in the tax reform bill. The IRS will also revise the withholding calculator on their website to help employees anticipate how much will be withheld from their paychecks. It is always encouraged for employees to review their tax withholding's to ensure too little or too much is not being taken out of their paychecks.
This is only the beginning, since the IRS expects to make additional changes in 2019 to reflect the passage of the new tax reform bill. In order to better understand the impact of these new withholding rates, the IRS will work with the payroll industry and businesses to encourage employees to fill out new W-4 forms. This information will be used to help determine the effectiveness of the rates and better determine the changes needed in 2019.
For more information regarding these new changes in the tax code, contact the Tax Doctor or one of the professionals at Assurance Tax and Accounting Group. We have read through the new tax reform bill and understand the changes that are being made to the withholding tax. Our professionals are here to help educate you on the new code and show you how it will impact your current situation. Don’t wait, give our tax experts a call today at (225) 757-5518 to get your questions answered.