Treasury Secretary Mnuchin 'Very Focused on Cryptocurrencies'

Kristopher Drake
January 14, 2018

Taking the first concrete step toward the Republican tax plan's promise of fatter paychecks for millions, the Trump administration on Thursday issued new guidelines for how much employers should withhold as taxes from workers' pay.

Employers should start using the 2018 withholding tables as soon as possible, "but not later than February 15", the Internal Revenue Service said in a news release (IR-2018-05).

"We have reviewed this very carefully, and based upon last year's withholding tables, approximately 76 percent of taxpayers were withheld so that they had refunds at the end of the year".

The U.S. Treasury Department released the new withholding tables under the Tax Cuts and Jobs Act, drawing the praise of at least one Louisiana congressman.

Many employees will begin to see increases in their paychecks to reflect the new law in February. Ron Wyden of OR and Rep. Richard Neal of MA, both Democrats, said in a letter to acting IRS Commissioner David Kautter. "We've constructed the tables so that most people should be accurately withheld if they leave their W-4 in place", a senior IRS official noted.

To ensure an accurate calculation, taxpayers will have to enter their personal financial information into a calculator expected to be unveiled next month on the website

Democrats are concerned the rushed withholding tables could leave many tax filers in a situation of potentially being underwithheld for tax year 2018 and therefore left owing money when they file their tax returns in early 2019.

The IRS is also working on revising the Form W-4. "And we're going to actively encourage and make sure that taxpayers understand how to go on to the calculator, once it's up and running". You might not have bothered looking at it since then and you should take this opportunity to review your withholdings and see if it is time to make some changes.

Treasury Secretary Steven Mnuchin at the White House press briefing on Thursday dismissed suspicions that administration is "juicing" the tables as a "ridiculous charge".

The calculator and new Form W-4 can be used by employees who wish to update their withholding in response to the new law or changes in their personal circumstances in 2018, and by workers starting a new job. Treasury would achieve that, the lawmakers surmised in the letter, by pushing the IRS to change its formula for withholdings.

Other reports by Ligue1talk

Discuss This Article