Under the newly passed Tax Cuts and Jobs Act almost everyone will be paying a different amount in Federal Income Taxes come April 2019. Beginning in February 2018, the taxes withheld from employees’ paychecks were reduced, resulting in greater take home pay. However, don’t confuse the amount withheld from your paycheck with the amount you will ultimately owe when you file your return. If you do not expect your Federal Income Tax liability to drop in 2018 you should adjust your payroll withholding now. Failure to do so can result in a large amount due when you file your taxes.
The amount withheld from your paycheck is based on the last Form W-4 you completed for your employer. The form prior to 2018 was based on the number of personal exemptions, among other factors, a criterion not present in the new tax laws.
The Internal Revenue Service (IRS) released a new version of Form W-4 and its online withholding calculator to help taxpayers check their 2018 tax withholding. I suggest you follow the recommendation issued by the IRS and use these tools to make sure you have the right amount of tax taken out of your paycheck. You can use the IRS’ Withholding Calculator to determine if adjustments need to be made. If so, you can access the new Form W-4 here.
Employees must submit the completed W-4 to their employers.