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Tuesday January 15, 2019

Washington News

Washington Hotline

New IRS Withholding Calculator

On February 28, the Service released a new withholding calculator. With the passage of the Tax Cuts and Jobs Act (TCJA), many families will be able to reduce withholding by 10% to 50% in 2018. Some high-income taxpayers will need to increase withholding.

Acting IRS Commissioner David Kautter stated, "Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they are having the right amount of tax withheld for their personal situation."

There are several groups of taxpayers who should use the new calculator to adjust their withholding. These include the following:
  1. Two income families
  2. Taxpayers with two or more jobs
  3. Families who claim the Child Tax Credit
  4. Taxpayers who itemized in 2017
  5. Upper-income single and married taxpayers
To use the new IRS withholding calculator, visit, select "Pay" and then "Tax Withholding." There are five things you should know about this process:
  1. Pay Stub - You will need your latest pay information from your workplace.
  2. Tax Return - Some calculator information will come from your 2017 or 2016 tax return.
  3. No Personally Identifiable Information - The withholding calculator does not ask for your name, Social Security Number, address or bank account number. Keep this in mind if a scammer sends you an email with a purported link to the IRS withholding calculator. Do not click on that link.
  4. Results - The withholding program will show your estimated income tax for 2018. It also displays the number of allowances you may enter on IRS Form W-4.
  5. New Form W-4 - You may download IRS Form W-4. You should fill it out and claim the correct number of allowances to adjust your withholding. This may be submitted to your employer who can adjust your amount of withholding. Most families and middle-income individuals will have a lower withholding rate and larger take-home amounts in 2018.

Published March 2, 2018
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