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(CNN Money) — The U.S. Treasury and the IRS on Thursday put out new guidance and withholding tables for employers that incorporate changes from the new tax law.
Under those new tables, the Treasury estimates that 90% of people who get a paycheck are likely to see more in take-home pay, as soon as February. Employers will have until Feb. 15 to incorporate the changes in their payroll systems.
Taxpayers - Tables - Money - Bill - Taxes
But for many taxpayers, they will need to assess whether the new tables really are withholding enough money so that they’re not saddled with a big bill when they file their taxes next year.
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.
Tables - Change - Workers - Tax - Liability
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 IRS is not issuing new Form W-4s … yet. “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.
Plan - W-4s - Exemptions - Feature - Withholding
The plan is to have new W-4s by 2019. Personal exemptions are a core feature of the current withholding system, but now that they are eliminated, “it’s necessary to build a new approach to withholding, which will take some time,” the senior IRS official said.
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 currently take on their W4s once the...
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