Mnuchin, IRS urge you to check your paycheck
The U.S. Treasury Department on Wednesday urged American workers to double-check their paycheck withholdings in the wake of the Tax Cuts and Jobs Act, which is expected to leave many Americans with more money in their wallets.
“This is a pivotal and exciting time for American workers,” Treasury Secretary Steven Mnuchin said in a statement. “The ‘paycheck checkup’ will allow employees to keep more of their hard earned money, which is why we passed the Tax Cuts and Jobs Act.”
The IRS unveiled a tool in February that allows workers to calculate how much should be withheld from their pay. If the amount is incorrect, the agency urges individuals to fill out a new W-4 form to make the necessary changes.
For the many Americans looking at larger paychecks this year, there are several reasons why experts are urging individuals to check their withholding amounts.
As previously reported by FOX Business, the IRS did not create new W-4 forms based on the updated law. As a result, for the current year employers are using the documents already on file, which are not tailored to the updated policies. Due to a myriad of sweeping changes to everything from personal exemptions to the standard deduction, this is proving to be problematic for taxpayers, some of whom are actually paying too little in taxes each week. If those individuals continue payments at current levels, they will receive a big surprise from the IRS come next April in the form of a bill instead of a refund.
The IRS is planning to release a new W-4 commensurate with the tax code changes later this year and experts are hopeful that will help alleviate some uncertainty.