IRS Withholding CalculatorIRS Updates Withholding Calculator
Provides Updated Information Under the New Tax Act
IR-2018-36 - February 28, 2018 - The Internal Revenue Service today released an updated Withholding Calculator on IRS.gov and a new version of Form W-4 to help taxpayers check their 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December.
The IRS urges taxpayers to use these tools to make sure they have the right amount of tax taken out of their paychecks.
“Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter.
The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets.
If changes to withholding should be made, the Withholding Calculator gives employees the information they need to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Employees will submit the completed W-4 to their employer.
“Withholding issues can be complicated, and the calculator is designed to help employees make changes based on their personal financial situation,” Kautter said. “Taking a few minutes can help taxpayers ensure they don’t have too little – or too much – withheld from their paycheck.”
The withholding changes do not affect 2017 tax returns due this April. However, having a completed 2017 tax return can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year. Read More
Michigan UIA Update
Notice of Intent to Withhold
Federal Income Tax Refund
March 2, 2018 -- MTAP has received a member inquiry regarding recently received business client correspondence from the Michigan Unemployment Insurance Agency. Some were questioning the legitimacy of the letter, so we asked Linda Kalinowski, from Michigan's Unemployment Insurance – Employer System Support Group, to respond. Here is what she advises:
"The letter, Notice of Intent to Withhold Federal Income Tax Refund, is a real letter and it was sent to employers who have unresolved outstanding balances with UIA. State unemployment agencies are required to participate in this federal debt recovery program and Michigan is now becoming compliant with this requirement which is what prompted the mailing of the letters.
If your clients have received the letters, they are real and they need to respond to them. If they are out of business and have not filed a UIA 1772 notifying us of that, they need to do so as soon as possible. If they have missing returns that they are responsible for filing, they need to file the returns or provide proof that the returns were filed as soon as possible. If they have unpaid taxes, penalties or interest with UIA, they need to contact the number on the form and resolve their balance."
The bottom line: the client and practitioner should not ignore the letter.