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IRS Releases Updated Withholding Calculator and Form W-4      3/5/2018

Updated Withholding Calculator, Form W-4 Released; Calculator Helps Taxpayers Review Withholding Following New Tax Law

https://www.irs.gov/newsroom/updated-withholding-calculator-form-w-4-released-calculator-helps-taxpayers-review-withholding-following-new-tax-law

IR-2018-36, Feb. 28, 2018

The Internal Revenue Service today released an updated Withholding Calculator on IRS.gov and a new version of Form W-4 to help taxpayers check their 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December. The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets.

The IRS encourages employees to use the Withholding Calculator to perform a quick “paycheck checkup.” An employee checking their withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time in 2019. It can also prevent employees from having too much tax withheld; with the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.

If changes to withholding should be made, the Withholding Calculator gives employees the information they need to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Employees will submit the completed W-4 to their employer.

The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year.

Among the groups who should check their withholding are:

• Two-income families.
• People with two or more jobs at the same time or who only work for part of the year.
• People with children who claim credits such as the Child Tax Credit.
• People who itemized deductions in 2017.
• People with high incomes and more complex tax returns.

This spring and throughout the year, the IRS will be working closely with businesses as well as the tax and payroll communities to help educate the public about the new withholding guidelines and the Withholding Calculator. For 2019, the IRS plans to make further changes involving withholding. The agency will work with businesses and the tax and payroll communities to explain and implement these additional changes.

More information is available in the special Withholding Calculator Frequently Asked Questions.

This news release is also available in Spanish:

IRS publica Calculadora de Retención actualizada, Formulario W-4; calculadora ayuda a contribuyentes a revisar retenciones según nueva ley tributaria

https://www.irs.gov/es/newsroom/updated-withholding-calculator-form-w-4-released-calculator-helps-taxpayers-review-withholding-following-new-tax-law

El Servicio de Impuestos Internos publicó hoy la Calculadora de Retención actualizada en IRS.gov y una nueva versión del Formulario W-4 para ayudar a los contribuyentes a verificar su retención de impuestos de 2018, luego de la aprobación de la Ley de Empleos y Reducción de Impuestos en diciembre. El IRS insta a los contribuyentes a usar estas herramientas para asegurarse de que tienen la cantidad correcta de impuestos deducidos de sus cheques de pago.

Si se deben hacer cambios a la retención, la Calculadora de Retención les brinda a los empleados la información que necesitan para completar un nuevo Formulario W-4, Certificado de Exención de Retenciones del Empleado. Los empleados enviarán el Formulario W-4 a su empleador.