What the new tax withholding tables mean for your take-home pay

Pauline Gross
January 12, 2018

Mr. Mnuchin pushed back on those concerns Thursday, saying the IRS usually issues its withholding tables every January, and the agency chose to wait until February to take into account the changes under the new tax system.

Senator Ron Wyden of OR and Representative Richard E. Neal of MA, the top Democrats on the Senate and House tax writing committees, sent a letter to the Government Accountability Office asking it to analyze the 2018 withholding tables and determine whether they will result in "systematic under-withholding".

The Internal Revenue Service released guidance for employers about how much tax they should withhold from workers' paychecks in 2018 - and said it would soon offer an online calculator that employees can use to make sure the amounts are correct. The IRS doesn't expect that to change much under the new tax law given the preference filers have shown for getting big refunds, rather than just breaking even or having to cut a new check to Uncle Sam when they file their returns.

The announcement came as officials detailed guidelines concerning the implementation of the new tax rules, and it was met with criticism. The online calculator will not be available until sometime next month.

Top Democratic tax-writers have expressed concerns that Treasury may have applied pressure on the IRS to underwithhold from paychecks so that taxpayers would see a bigger boost to their paychecks during this election year.

There are 131 filing systems that will be affected by the new law, the report said.

"Republicans are using brute force and speed to implement a law that will deliver a financial blow to hardworking Americans all across the country", Sen. Ron Wyden of OR and Rep. Richard Neal of MA. "I look forward to GAO's independent review of these tables, which will expose whether the Trump administration is tampering with Americans' paychecks, resulting in a whopping tax bill next year".

North Korea diplomats say attack on USA would be 'suicidal'
Satellite imagery shows "significant tunneling" at North Korea's Punggye-ri nuclear test site, a report revealed Thursday. Kim , on the other hand, has charged that he would "tame the mentally deranged USA dotard with fire", referring to Trump.

Facebook CEO Mark Zuckerberg unveils sweeping changes to News Feed
Facebook has said before that it will emphasize personal connections over business pages and celebrities that people follow. Prioritizing family and friends against Publishers and Brands will hurt them as they get most of traffic through Facebook .

Mets bring back Jay Bruce
The free agent outfielder has agreed to a 3-year, $39 million deal with the Mets , as first reported by ESPN's Jerry Crasnick. After being sent to Cleveland, however, Bruce said he enjoyed his time in NY and was open to coming back.

Many Americans are likely to see changes and adjustments this year in their tax payments as the law goes into effect. The tax code now limits the deduction for state and local taxes to $10,000.

The law lowers tax rates, which is the primary reason Americans will see bigger paychecks next month, but it also limits or scales back tax deductions, changes that might not be realized until Americans file their tax returns.

The government is requiring employers to begin using the new guidelines as soon as possible, but "no later than February 15".

And roughly three-quarters of tax filers are overwithheld because they take too few allowances. In the meantime, employers and payroll service providers should continue to use the existing 2017 withholding tables and systems.

There are new tax credits while other mainstays - like the $4,050 personal exemption - are gone.

These tax changes are all scheduled to expire after 2025, though Republicans have said they want to make them permanent.

Other reports by GizPress

Discuss This Article