The IRS released new income tax withholding tables that reflect the changes to the tax bracket structure in the Tax Cuts and Jobs Act (TCJA) passed in late December. Employers will have until Feb. 15 to update their payroll systems to reflect the new changes, and employees will start seeing the changes in their paychecks after that point.
The TCJA reduces income tax rates for almost all taxpayers. Widespread tax changes like this seldom happen, so it’s worth keeping an eye on your pay stubs over the next few weeks. The danger is that if the changes aren’t done right, you’ll either have too much tax taken out every paycheck, or end up with a big tax bill because too little was withheld. Here are some tips: