In January the Internal Revenue Service released Notice 1036 updating the income-tax withholding tables as a result of the tax reform legislation enacted in December 2017. This was the first in a series of updates they will improve the accuracy of 2018 withholdings. Here is your guide to the 2018 IRS Tax Withhold Tables.
The deadline for using the new 2018 Tax withholding tables was February 15th. If you have yet to do so you will need to transfer over to the 2018 withholding table as soon as possible to avoid a higher penalty.
Your Guide to The 2018 IRS Tax Withhold Tables
Future Form W-4 Revisions
Later on this year the IRS plans to revise Form W-4 because this form is ultimately used to determine how much of their paycheck is withheld toward income taxes. Notice 1036 should help to minimize the burden on taxpayer and employers. At this time employees are not required to do anything.
2017 Vs. 2018 Withholding Tables
The new law passed in December made several changes to the established tax plan including an increase in standard deductions, the repeal of personal exemptions, and updates in tax rates and brackets.
The new 2018 withholding tables should result in the correct amount of tax withholdings. Ideal this will mean not too much or too little. The IRS has revised the withholding tax calculator on their website so your employees can understand their new withholdings.
2018 Withholding Table Details
The employee portion of Social Security: 6.2%
with a taxable wage of $128,400
The employee portion of Medicare: 1.45% with no wage base limit
Medicare Surtax: .9% which exceeds $200,000 or $250,000 for married taxpayers
Guaranteed Tax Compliance
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