The new tax law is causing alot of confusion among taxpayers, anxious to find out if they will owe money and have filed correctly. Most all Americans are set to get a tax break from the Trump tax cuts, enacted by Congress this year. Although we have found many instances of taxpayers who thought they would get a tax cut, only to file taxes and find out the opposite was true, they ended up with a tax increase.
The new tax law lowered the marginal tax rates for the vast majority of Americans, and also enlarged the income amounts at which the new tax rates would kick in for the majority of taxpayers. The end result was that lower tax rates are being enjoyed by the vast majority of Americans. Employers have had to change the amounts that they were withholding form the paychecks of their employees, taking less out, giving more take home pay to their employees. A nice benefit of the new tax law.
The impact of filing the tax bill so late into the calendar year is that changing the tax code and tax table took some time, and by the time employers were ready to change to the new rates, they had already withheld more from the checks of employees than needed. The IRS, in response to this problem, released an updated withholding calculator and form W-4, which can be used to change and or update the tax withholding to make sure it is in line with what will be owed by year’s end.
This withholding calculator can also be used by the self employed, or those who are retired to make sure that they are correctly withholding, so that they can prepare accurate tax returns. The new tax law, once the kinks are worked out, will provide most taxpayers with a substantial tax break. The new withholding calculator can also be used by those who are late in filing, to determine whether they will owe, or if they shall get a tax refund.