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IRS Withholding Calculator

Mar 5, 2018 | Larry | 2017 Tax Cuts & Jobs Act, IRS, W-4, Withholding | No Comments

In response to the 2017 Tax Cuts & Jobs Act. the IRS has come out with a new online withholding calculator. Deductions, credits and exemptions have all been affected. First, a maximum $10,000 can be deducted for a combination of state income and property tax. Those living in states with high income and property tax loads will feel it acutely. Also in the tax bill, the personal and dependency exemptions have been removed. For tax year 2017, each exemption reduces taxable income by $4050.

Both the standard deduction and and child tax credit have doubled. For singles, it has increased from $6350 to $12,000;  married couples increased from $12,700 to $24,000, and for heads of households it increased from $9350 to $18,000. The child tax credit went from $1000 per child to $2000.

Given all these variables, if your taxable income goes up but withholding does not keep pace, you could be in for a nasty and expensive surprise when you file your 2018 taxes.



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