Tax Cuts and Jobs Act – What Does It Mean for Your Payroll?
On Dec 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act that will, as determined by the Tax Policy Center, cut income taxes for 143 million Americans. The law goes into effect January 1, 2018.
This new tax law will obviously effect pay checks. Here’s how initially:
- New Income Tax Withholding Tables-
Even though new federal income tax tables and rates will take effect on January 1, we cannot withhold at the new rates until guidance from the U.S. Treasury Department is released in the form of new tax tables. According to IRS officials: “We anticipate issuing the initial withholding guidance in January, and employers and payroll service providers will be encouraged to implement the changes in February.” Time & Pay will continue using the 2017 tables to determine the withholding tax from your employees’ pay check until the revised 2018 tables are issued and our tax tables can be updated. We will notify you when this update occurs. Hopefully, many of your employees will notice when this update occurs.
- Federal Forms W-4-
Your employees may have questions about the effect of the Tax Cuts Act on their wages, and may wish to submit a new W-4 as a result. You can provide them with, or refer them to, this “White Paper” from CCH as it provides one of the best summaries we have seen of the law and how it may affect their paycheck.
While some payroll professionals are predicting a new W-4 form that may require resubmission by employees, IRS officials recently emphasized these new tax tables “will be designed to work with the existing Forms W-4 that employees have already filed, and no further action by taxpayers is needed at this time.”
The Advi$or will keep you posted as to other changes that come down the line due to this new Tax Act.
Time & Pay is a professional payroll service provider located in Johnson City, TN. We service businesses of all sizes and types throughout the United States. Founded in 1992, Time & Pay provides businesses with complete payroll services , guaranteed payroll tax compliance, automated time and attendance systems and services, pay-as-you-go worker’s comp, human resource management systems and services, ACA compliance and more. We provide our customers with the cost effective tools you need to better manage your payroll, your employees and your business. Time & Pay’s services guarantee you will save money, time and aggravation and we back them up with the customer service you expect and deserve. Contact Us today to learn why business owners throughout the country are saying:
“Time & Pay! Why would you do payroll and timekeeping any other way?”
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