Wolters Kluwer Tax & Accounting Reviews Possible Under Withholding Exposure for Taxpayers, Causes, and Possible Remedies
Sep. 04, 2018
--(BUSINESS WIRE)--Sep 4, 2018--Wolters Kluwer Tax & Accounting:
What: The Government Accounting Office (GAO) has issued a report discussing the possible increase in the number of taxpayers who will not have sufficient withholding taken out of their paychecks in 2018, resulting in tax liabilities with their tax return and possible under withholding penalties. GAO estimates that an additional three million taxpayers will be under withheld this year as compared to 2017. Those most likely to be newly affected are married couples with two children filing a joint return with income around $180,000 and who claim itemized deductions. The possibility of increased under withholding for 2018 results from the withholding tables developed by the IRS for 2018 and the tax changes made by the Tax Cuts and Jobs Act.
Why: Taxpayers who may be subject to under withholding should review their tax situation and consider filing a revised W-4 with their employer to increase withholding for the remainder of the year. The following outlines the causes for under withholding and possible corrective actions taxpayers can take:The 2018 withholding tables continued to use the projected value of the personal exemption as the value for the withholding allowance even though the personal exemption had been repealed for 2018 The withholding tables adjusted for the Tax Cuts and Jobs Act changes to the tax rates, the standard deduction, and the personal exemption, but not for changes to itemized deductions Changes to a taxpayer’s itemized deductions can only be reflected in withholding by filing a revised Form W-4 with an employer claiming fewer withholding allowances for itemized deductions The Form W-4 also permits employees concerned about under withholding to specify an additional dollar amount to be withheld from each paycheck
Who: Tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting, is available to discuss taxpayers most likely to be affected by under withholding and what can be done to correct the problem.
Contact: To arrange interviews with Mark Luscombe or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact:
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CONTACT: Wolters Kluwer Tax & Accounting
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES ACCOUNTING FINANCE
SOURCE: Wolters Kluwer Tax & Accounting
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PUB: 09/04/2018 01:00 PM/DISC: 09/04/2018 01:00 PM