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IRS Unveils New Income Tax Withholding Guidelines

14 January, 2018, 00:09 | Author: Priscilla Morrison
  • The IRS will release an online calculator by the end of February so taxpayers can ensure their paychecks are accurate

Mnuchin added that his department had formed a working group to address its concerns about cryptocurrency usage by nefarious individuals and organizations.

Treasury and Internal Revenue Service officials made the predictions while releasing new tax withholding tables, which USA employers must begin using by February 15 to determine how much federal tax gets subtracted from employee wages under the new tax law.

Trump and the Republicans are counting on the tax-cut law, the first significant legislative achievement of his presidency, to ensure the GOP retains its majorities in Congress in this year's elections.

Officials have given employers a deadline of February 15 to implement the new withholding tables resulting from the passage of the president's Tax Cuts and Jobs Act.

The major changes affecting individuals include new tax brackets, (mostly) lower income tax rates, a near-doubling of the standard deduction and the elimination of both personal exemptions as well as many itemized deductions.




"The IRS appreciates the help from the payroll community working with us on these important changes", said Acting IRS Commissioner David Kautter. Treasury would achieve that, the lawmakers surmised in the letter, by pushing the IRS to change its formula for withholdings.

Mnuchin said the United States authorities, including the Federal Reserve, were studying the advantages and disadvantages of issuing digital dollars instead of hard cash, but "the Fed and we don't think there's any need for that at this point".

In the meantime, he urged filers who have complicated tax situations - i.e., anyone who is not single, childless and holding down just one job - to review the number of allowances they now take on their W4s once the IRS puts out its new withholding calculator by the end of February. "Despite many false claims regarding the effects of our efforts, hardworking Americans are already seeing the immediate benefits of this new, pro-growth tax code".

"We would encourage every taxpayer to go to IRS.gov and run their financial information through that calculator so that they understand what their situation is", said a senior IRS official, who spoke at a briefing with reporters on the condition he was not named. However, the situation has changed in recent times, with Swiss authorities showing greater willingness to cooperate with the IRS.

In their letter, Wyden and Neal said the IRS lacks independent and nonpolitical leadership. "We expect based upon the new tables there will be no material change in this number", he said.

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