At the tail-end of 2017, the Republican tax plan was signed into law. This is the most significant tax change in decades and trickles down from Congress, employers, to employees. Big changes are in store for 2018, but worry not! That’s what we’re here for. Below we’ve highlighted our top 4 things you need to know.
New and Improved W4’s
There will be an updated W4 – the form employers use to withhold the proper amount of taxes – in circulation for 2018. However, currently, the new W4 is just in preview mode. You will be able to see the new tax tables on page two of the W4. You don’t need to wait for the official release to get a taste of it, check out the preview W4 here!
Double Down with the Standard Deduction
The days of itemizing your taxes may be over. The standard deduction has been drastically increased. According to the IRS, about 70% of Americans take the standard deduction, and in the coming years, that percentage is likely to increase. These changes are still in flux, but it may be time to revisit how you approach taxes. We recommend reaching out to an advisor or researching what will change for you.
How will your Paycheck Change?
Take a close look at those paychecks, because they are about to change. Depending on where you fall in the bracket will determine what you see. But the dollars and cents you take home will change. The IRS is recommending that you revisit what you are claiming on you W4 after a couple of paychecks.
File away, none of this will affect your 2017 taxes. All of these changes for taxes are taking effect for 2018. The W2’s you receive for 2017 will go unchanged. You can file your taxes as you normally do.
Great work should be recognized! You may have come into contact with our Customer Service Reps, and maybe even our sales team, but you can bet this time of year our tax teammates are the unsung heroes of Performance HCM. They help keep you compliant, and look good doing it! Rain, snow, or the weekend can’t stop these folks. Cheers tax team!
If you are wanting the nitty gritty of these changes, check out the IRS’ 1036 notice. You can view it here.
CNN Money outlines 34 big changes in the tax reform for you. Check it out!