Most Americans will see bigger paychecks in the coming weeks, thanks to a tax overhaul passed at the end of 2017. But unpleasant surprises still could hit many, making it wise to professionals such as Fort Lauderdale accountants Sterling Accounting.
More than 90 percent of workers will see larger paychecks when new withholding tables go into effect, the Wall Street Journal reports. But don’t be lulled into a false sense of security.
According to the Journal:
Many Americans’ W-4 forms haven’t been updated in years. In addition, the W-4 form being used by employers to calculate new withholding is based on a provision that has been repealed.
The upshot is that changes to paychecks may not reflect what a taxpayer will owe for tax year 2018, or the size of future tax refunds. Taxpayers who are under-withheld could owe penalties, and some who count on getting large refunds could be shocked to see them shrink.
“Individual results are going to vary widely, and people can’t assume that paycheck withholding equals their tax bill for 2018,” says Mary Hevener, a payroll tax specialist and attorney at Morgan, Lewis & Bockius.
Officials are working on a new withholding calculator, which they hope to have ready in February.
The complexities of the new tax laws are good reasons to seek the expert help of Fort Lauderdale accountants Sterling Accounting.
Whether you need a simple 1040EZ tax filing or a 1040, we can handle it all for you. We provide innovative solutions for tax issues to minimize your tax liability, we find deductions commonly overlooked, and we stay up-to-date and well informed on all tax laws and legislation. It’s good to also remember that tax season comes around once every year, so good planning throughout the year is important to mitigating your tax exposure, allowing you to keep ore of what you earn! It’s a delicate balance that exists between optimizing your after-tax income and minimizing your pre-tax dollars. We offer advice on both short-term and long-term tax strategies, initiatives and investments.