The passage of the Tax Cuts and Jobs Act, which will affect 2018 tax returns. Checking withholding amounts is important. These tax law changes include:
• Increased standard deduction
• Eliminated personal exemptions
• Increased Child Tax Credit
• Limited or discontinued certain deductions
• Changed the tax rates and brackets
If you need to adjust your withholding complete a new Form W-4 and submit it to your employer as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.
As a general rule, the fewer withholding allowances an employee enters on Form W-4, the higher their tax withholding. Entering “0” or “1” on line 5 of the W-4 means more tax withheld. Entering a larger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty. Want to do a paycheck checkup? The IRS has a free interactive tool. www.irs.gov/payments/tax-withholding