2018 Withholding Tables

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
rkhusky
Posts: 5547
Joined: Thu Aug 18, 2011 8:09 pm

2018 Withholding Tables

Post by rkhusky » Thu Jan 11, 2018 2:30 pm

The Federal 2018 tax brackets have been released:
https://www.irs.gov/pub/irs-pdf/n1036.pdf

edit: New link is: https://www.irs.gov/pub/irs-prior/n1036--2018.pdf
Last edited by rkhusky on Tue Jan 16, 2018 7:53 am, edited 1 time in total.

pshonore
Posts: 6421
Joined: Sun Jun 28, 2009 2:21 pm

IRS announces new withholding tables for 2018

Post by pshonore » Thu Jan 11, 2018 3:04 pm

[Thread merged into here, see below. --admin LadyGeek]

https://www.irs.gov/pub/irs-pdf/n1036.pdf

User avatar
jadd806
Posts: 247
Joined: Mon Aug 17, 2015 4:34 pm
Location: New England

Re: IRS announces new withholding tables for 2018

Post by jadd806 » Thu Jan 11, 2018 3:18 pm

Withholding has always confused me. I'm trying to stop over-paying and ending up with a huge refund.

If I plan to claim the new $12k standard deduction, I should claim 3 withholdings for a total of $12,450 withheld annually, correct?

missingdonut
Posts: 91
Joined: Thu Jun 23, 2016 9:37 am
Location: Donutville, WI

Re: IRS announces new withholding tables for 2018

Post by missingdonut » Thu Jan 11, 2018 3:31 pm

jadd806 wrote:
Thu Jan 11, 2018 3:18 pm
If I plan to claim the new $12k standard deduction, I should claim 3 withholdings for a total of $12,450 withheld annually, correct?
Single, 2. There is a small amount per week that is not subject to income tax in addition to the withholding allowances.

User avatar
corn18
Posts: 980
Joined: Fri May 22, 2015 6:24 am

Re: IRS announces new withholding tables for 2018

Post by corn18 » Thu Jan 11, 2018 3:49 pm

Interesting they dropped the supplemental income rat from 25% to 22% for stuff under $1M.

Bwlonge
Posts: 141
Joined: Wed Nov 22, 2017 6:36 am

Re: IRS announces new withholding tables for 2018

Post by Bwlonge » Thu Jan 11, 2018 3:55 pm

I'm maxing my 403b and traditional IRA, standard deduction, starting in the 22% bracket and I'll end up in the 12%, 3 federal 1 state (MA). It's deducting 90% of what I project I'll be paying in taxes, so I'll end up owing a little bit, in theory. Maybe not though if I squeeze out a credit or two.

FactualFran
Posts: 729
Joined: Sat Feb 21, 2015 2:29 pm

Re: IRS announces new withholding tables for 2018

Post by FactualFran » Thu Jan 11, 2018 3:59 pm

jadd806 wrote:
Thu Jan 11, 2018 3:18 pm
If I plan to claim the new $12k standard deduction, I should claim 3 withholdings for a total of $12,450 withheld annually, correct?
You should not use any additional allowances to get the effect of the standard deduction. The standard deduction is taken into account by the IRS when it calculates the withholding tables.

In my case, the 2018 withholding amount for the year is about $300 more than the 2018 income tax will be (on my income subject to withholding). That is without using any additional withholding allowances and with using the standard deduction when calculating the income tax for the year.

[edit: Deleted final paragraph.]
Last edited by FactualFran on Thu Jan 11, 2018 5:08 pm, edited 1 time in total.

User avatar
Ethelred
Posts: 337
Joined: Sun Oct 30, 2016 9:38 am

Re: IRS announces new withholding tables for 2018

Post by Ethelred » Thu Jan 11, 2018 4:08 pm

For comparison, the 2017 tables are in Publication 15, here:
https://www.irs.gov/pub/irs-pdf/p15.pdf

FullYellowJacket
Posts: 324
Joined: Thu Apr 03, 2014 8:21 am

Re: IRS announces new withholding tables for 2018

Post by FullYellowJacket » Thu Jan 11, 2018 4:11 pm

I'm going to wait until the IRS and maybe some third party websites publish updated withholding calculators. If I overpay the first few months of 2018 that is OK.

User avatar
Ice-9
Posts: 1314
Joined: Wed Oct 15, 2008 12:40 pm
Location: Rockville, MD

Re: IRS announces new withholding tables for 2018

Post by Ice-9 » Thu Jan 11, 2018 4:22 pm

We had significant itemized deductions before, but we're pretty sure we will be taking the standard deduction in 2018. I'm guessing I'm at risk of withholding too little. Need to look at this, thanks for the reminder...

engineer1969
Posts: 99
Joined: Tue Jul 05, 2011 6:56 pm

Re: IRS announces new withholding tables for 2018

Post by engineer1969 » Thu Jan 11, 2018 4:32 pm

Ice-9 wrote:
Thu Jan 11, 2018 4:22 pm
We had significant itemized deductions before, but we're pretty sure we will be taking the standard deduction in 2018. I'm guessing I'm at risk of withholding too little. Need to look at this, thanks for the reminder...
I suspect you'll be pleasantly surprised. It will be worth the exercise of estimating your taxes.

H-Town
Posts: 1255
Joined: Sun Feb 26, 2017 2:08 pm

Re: IRS announces new withholding tables for 2018

Post by H-Town » Thu Jan 11, 2018 4:35 pm

IRS Withholding Tables Frequently Asked Questions

Q: Why are these changes being made?
A: The new withholding tables are needed to reflect the changes in tax rates and tax brackets, increased standard deduction and repeal of personal exemptions that were included in the new tax reform law signed in December. The withholding guidance issued today is for employers to make changes to their payroll systems and is designed to work with existing W-4s that employees have on file.

Q: How soon will people see the changes in their paychecks?
A: Employees should begin to see withholding changes in their checks in February. The exact timing depends on when their employer can make the change and how often they are paid. It typically takes payroll providers and employers about a month to update withholding changes on their systems.

Q: Will employees need to take any action to get the new withholding rates?
A: No. Payroll changes required each year are made by employers and their payroll providers, so employees are not required to take any extra steps. However, employees should review their withholding to make sure that it is accurate. IRS will be releasing a new calculator and Form W-4 soon, to help employees ensure withholding is accurate.

Q: What is a withholding table?
A: A withholding table shows payroll service providers and employers how much tax to withhold from employee paychecks, given each employee’s wages, marital status, and the number of withholding allowances they claim.

Q: What is a Form W-4?
A: This is an IRS form that employees provide to their employers, to determine the amount of federal income tax to withhold from the employees’ paychecks. The form helps employees adjust withholding based on their personal circumstances, such as whether they have children or a spouse who is also working. The IRS always recommends employees check their withholding any time their personal or financial information changes.

Q: Will people need to fill out a new W-4 form right now?
A: No, the new withholding tables are designed to minimize taxpayer burden as much as possible and will work with the Forms W-4 that workers have already filed with their employers to claim withholding allowances. The IRS is working on revising the Form W-4 to more fully reflect the new law and provide taxpayers information to determine whether they need to adjust their withholding.

Q: Is the IRS working on a new Form W-4 to reflect the new tax law?
A: Yes. The IRS continues to work on more detailed withholding information, which will be available soon in Publication 15 and related publications. In addition, the IRS is working on revising the Form W-4 to more fully reflect the new law and providing taxpayers information to determine whether they need to adjust their withholding. The IRS is also revising the withholding tax calculator on IRS.gov to help employees who wish to update their withholding in response to the new law or other changes in their personal circumstances in 2018. The IRS anticipates this calculator should be available by the end of February.

Q: Should people check their withholding after the new 2018 Form W-4 and the withholding calculator are available?
A: Yes. It’s always a good idea for people to check their withholding status. The IRS encourages all taxpayers to check their withholding when the new information is available in February. The IRS will help educate taxpayers about the new withholding guidelines and the calculator. The effort will be designed to help workers ensure that they are not having too much or too little tax taken out of their pay.

Q: Are some taxpayers at risk of being under-withheld on their taxes with the changes to the withholding tables?
A: Some people have more complicated tax situations and face the possibility of being under-withheld. For example, people who itemize their deductions, couples with multiple jobs or individuals with more than one job a year will be encouraged to review their tax situations. The IRS will be encouraging people – particularly those with more than one income in their household—to check their withholding. The IRS is updating the 2018 Form W-4 and the IRS.gov withholding calculator to help with this process.

Q: Are many people under-withheld on their taxes?
A: Most people are over-withheld on their taxes, meaning that more taxes are held out of their paychecks than what they owe.

Q: Will the IRS be making further changes to Form W-4 in 2019?
A: In 2019, the IRS anticipates making further changes involving withholding. The IRS will work with the business and payroll community to encourage workers to file new Forms W-4 next year and share information on changes in the new tax law that impact withholding.

Nearly A Moose
Posts: 880
Joined: Fri Apr 22, 2016 5:28 pm

Re: IRS announces new withholding tables for 2018

Post by Nearly A Moose » Thu Jan 11, 2018 4:48 pm

I've historically entered whatever number of allowances (is that the term? I forget) that the form directs me to, then I've added $1,000 per month withholding, and that's usually gotten me to where I only owe a few grand. If I understand this correctly, my employer is going to keep my current W-4 exactly as it is, but the allowances (term?) will be adjusted based on the updated chart. Is that right? So I need to redo this thing from scratch to make sure the witholding doesn't get too far? It's been a few years since I looked at this closely.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Thu Jan 11, 2018 4:53 pm

missingdonut wrote:
Thu Jan 11, 2018 3:31 pm
jadd806 wrote:
Thu Jan 11, 2018 3:18 pm
If I plan to claim the new $12k standard deduction, I should claim 3 withholdings for a total of $12,450 withheld annually, correct?
Single, 2. There is a small amount per week that is not subject to income tax in addition to the withholding allowances.
Yes, with Single 2, 2*4150 + 3700 = 12000 gets "deducted" in the withholding tables, same as the standard deduction.

Same thing with Married 3: 3*4150 + 11,550 = 24000, same as the standard deduction.

This assumes no other income, no credits, etc. If that assumption is not true, one may need to adjust allowances.

PFInterest
Posts: 2252
Joined: Sun Jan 08, 2017 12:25 pm

Re: 2018 Withholding Tables

Post by PFInterest » Thu Jan 11, 2018 4:53 pm

thanks.

User avatar
ray.james
Posts: 1022
Joined: Tue Jul 19, 2011 4:08 am

Re: 2018 Withholding Tables

Post by ray.james » Thu Jan 11, 2018 5:01 pm

When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

User avatar
LadyGeek
Site Admin
Posts: 48056
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: IRS announces new withholding tables for 2018

Post by LadyGeek » Thu Jan 11, 2018 5:23 pm

^^^ I merged pshonore's thread into here. The software sorts by time, rkhusky was first.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

mikep
Posts: 3697
Joined: Wed Apr 22, 2009 9:27 pm

Re: IRS announces new withholding tables for 2018

Post by mikep » Thu Jan 11, 2018 5:31 pm

Does this take into account the increased child tax credit?

User avatar
Epsilon Delta
Posts: 7430
Joined: Thu Apr 28, 2011 7:00 pm

Re: IRS announces new withholding tables for 2018

Post by Epsilon Delta » Thu Jan 11, 2018 5:47 pm

mikep wrote:
Thu Jan 11, 2018 5:31 pm
Does this take into account the increased child tax credit?
A W-4 accounts for the child tax credit on line G of Personal Allowance Worksheet. The worksheet is not given to or used by the employer, so if you want to adjust withholding to take account of increased child tax credit you are going to need to do a new W-4. AFAIK the 2018 W-4 that reflects the changes is not yet available.

If they included the child tax credit in the withholding tables people with a different number of children would be mis-withheld.

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Thu Jan 11, 2018 5:49 pm

mikep wrote:
Thu Jan 11, 2018 5:31 pm
Does this take into account the increased child tax credit?
The withholding tables themselves do not.

From the draft version of the W-4, 2018 Form W-4 - fw4--dft.pdf, it appears that will attempt to use the CTC (and others) to guide one to the correct number of allowances.

Silk McCue
Posts: 1127
Joined: Thu Feb 25, 2016 7:11 pm

Re: IRS announces new withholding tables for 2018

Post by Silk McCue » Thu Jan 11, 2018 6:41 pm

An option for some to cut through the unknowns is to calculate their tax burden under the new law, set exemptions ridiculously high to make withholding 0 and enter in the additional amount to withhold per pay period on the next line based upon total due / pay periods in the year after accounting for the withholdings taken in 2018 prior to making the change.

User avatar
Epsilon Delta
Posts: 7430
Joined: Thu Apr 28, 2011 7:00 pm

Re: IRS announces new withholding tables for 2018

Post by Epsilon Delta » Thu Jan 11, 2018 6:56 pm

I expect the IRS to have a certain amount of leniency if you follow the instructions on a new W-4 and end up under-withheld. If you estimate your taxes in some other way not-so-much. (There is precedent for this other times the withholding instructions have changed).

Mike Scott
Posts: 991
Joined: Fri Jul 19, 2013 2:45 pm

Re: IRS announces new withholding tables for 2018

Post by Mike Scott » Thu Jan 11, 2018 8:28 pm

Change your W4 or not. Check the actual withholding in two or three months to see if you are on track to meet your estimated 2018 tax safe harbor. Change the W4 again if you need to revise it. I changed mine already and will reevaluate it in 6 or 7 months when I have a better estimate of total annual income for 2018.

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Thu Jan 11, 2018 9:42 pm

FullYellowJacket wrote:
Thu Jan 11, 2018 4:11 pm
I'm going to wait until the IRS and maybe some third party websites publish updated withholding calculators. If I overpay the first few months of 2018 that is OK.
One was published at 2018 Withholding allowances.

Direct link is https://drive.google.com/file/d/0B45krB ... sp=sharing

User avatar
grabiner
Advisory Board
Posts: 22699
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: IRS announces new withholding tables for 2018

Post by grabiner » Thu Jan 11, 2018 10:49 pm

FiveK wrote:
Thu Jan 11, 2018 5:49 pm
mikep wrote:
Thu Jan 11, 2018 5:31 pm
Does this take into account the increased child tax credit?
The withholding tables themselves do not.

From the draft version of the W-4, 2018 Form W-4 - fw4--dft.pdf, it appears that will attempt to use the CTC (and others) to guide one to the correct number of allowances.
That draft precedes the new tax law, so it's not useful in planning things for this year. (For example, it refers to exemptions for dependents, which no longer exist.)
Wiki David Grabiner

User avatar
grabiner
Advisory Board
Posts: 22699
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: IRS announces new withholding tables for 2018

Post by grabiner » Thu Jan 11, 2018 10:55 pm

missingdonut wrote:
Thu Jan 11, 2018 3:31 pm
jadd806 wrote:
Thu Jan 11, 2018 3:18 pm
If I plan to claim the new $12k standard deduction, I should claim 3 withholdings for a total of $12,450 withheld annually, correct?
Single, 2. There is a small amount per week that is not subject to income tax in addition to the withholding allowances.
The withholding tables are designed so that a single person claiming 2 allowances, or married couple claiming 3, with no income other that wages from one job, and no other income or tax credits, taking the standard deduction, will have exactly the right amount withheld. This was retained in the new tables for married couples; with 3 allowances (worth $12,450) and a $24,000 standard deduction, the first $11,550 of wages are not taxed, and then taxation starts at 10%.
Wiki David Grabiner

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Thu Jan 11, 2018 11:03 pm

grabiner wrote:
Thu Jan 11, 2018 10:49 pm
FiveK wrote:
Thu Jan 11, 2018 5:49 pm
mikep wrote:
Thu Jan 11, 2018 5:31 pm
Does this take into account the increased child tax credit?
The withholding tables themselves do not.

From the draft version of the W-4, 2018 Form W-4 - fw4--dft.pdf, it appears that will attempt to use the CTC (and others) to guide one to the correct number of allowances.
That draft precedes the new tax law, so it's not useful in planning things for this year. (For example, it refers to exemptions for dependents, which no longer exist.)
It also has Xs instead of numbers, making it particularly unusable. :wink:

Presumably the final version will both take into account the increased child tax credit and have numbers instead of Xs. :)

User avatar
Epsilon Delta
Posts: 7430
Joined: Thu Apr 28, 2011 7:00 pm

Re: IRS announces new withholding tables for 2018

Post by Epsilon Delta » Thu Jan 11, 2018 11:40 pm

FiveK wrote:
Thu Jan 11, 2018 11:03 pm

Presumably the final version will both take into account the increased child tax credit and have numbers instead of Xs. :)
Maybe they'll add some Ms and Is and Vs.

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Thu Jan 11, 2018 11:58 pm

Epsilon Delta wrote:
Thu Jan 11, 2018 11:40 pm
Maybe they'll add some Ms and Is and Vs.
Ah, yes, the MMXVIII edition.

User avatar
oldcomputerguy
Posts: 3323
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods

New IRS withholding guidance

Post by oldcomputerguy » Fri Jan 12, 2018 10:37 am

[merged into existing thread - moderator prudent]

For those (like me) who like to double-check withholding calculations for planning purposes, the IRS has released Percentage Method Tables for tax withholding calculation for 2018.

https://www.irs.gov/pub/irs-pdf/n1036.pdf

This document includes new bracket calculation tables for the various filing categories, as well as new amounts for withholding allowances for 2018.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

annielouise
Posts: 331
Joined: Wed May 14, 2008 4:11 pm

Re: IRS announces new withholding tables for 2018

Post by annielouise » Fri Jan 12, 2018 12:38 pm

I was surprised how quickly they released these. Plugged in our numbers and compared them to our new taxes and they look good. Just sticking with our current W4 ( MFJ, 2 exemptions , +$100) gets us just a little bit over what we will owe. The 22% on bonus money makes it easier too.

nolesrule
Posts: 744
Joined: Thu Feb 26, 2015 10:59 am

Re: IRS announces new withholding tables for 2018

Post by nolesrule » Fri Jan 12, 2018 1:26 pm

We were doing M0 + an extra $110 on my paychecks. We're going to need to add another ~$2000 total to additional withholding. And this is based on no raises or bonuses, which will fall marginally 2% short of enough withholding.

User avatar
oldcomputerguy
Posts: 3323
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods

Re: IRS announces new withholding tables for 2018

Post by oldcomputerguy » Fri Jan 12, 2018 1:31 pm

annielouise wrote:
Fri Jan 12, 2018 12:38 pm
I was surprised how quickly they released these. Plugged in our numbers and compared them to our new taxes and they look good. Just sticking with our current W4 ( MFJ, 2 exemptions , +$100) gets us just a little bit over what we will owe. The 22% on bonus money makes it easier too.
Same here. Based on my (ahem) Excel skills, with no changes to DW's W-4, our withholding will end up totalling about $500 over our final tax liability, vs about $600 for TY2017. So no changes contemplated.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

WanderingDoc
Posts: 1100
Joined: Sat Aug 05, 2017 8:21 pm

Re: IRS announces new withholding tables for 2018

Post by WanderingDoc » Fri Jan 12, 2018 2:34 pm

missingdonut wrote:
Thu Jan 11, 2018 3:31 pm
jadd806 wrote:
Thu Jan 11, 2018 3:18 pm
If I plan to claim the new $12k standard deduction, I should claim 3 withholdings for a total of $12,450 withheld annually, correct?
Single, 2. There is a small amount per week that is not subject to income tax in addition to the withholding allowances.
I have always filed '1' withholding, but I just bumped it up to '2' (single). Something I have been thinking about for a long time, as usually I get a $2-3K refund and I've been trying to titrate it so I end up owing a few bucks.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

User avatar
BrandonBogle
Posts: 2097
Joined: Mon Jan 28, 2013 11:19 pm

Re: IRS announces new withholding tables for 2018

Post by BrandonBogle » Fri Jan 12, 2018 2:59 pm

Honestly, I'm planning to use the same method I've done the past couple years. I change nothing on my W4 until I do my taxes. Then I take last year's tax owed, subtract whatever has already been withheld from my paychecks, and divide by the remaining number of paychecks for the year. I then mark 10 exemptions or some other really high amount and put the result of the above calculation as additional withholding.

This works for me because my income is generally stable from year to year and by meeting last year's minimum, I meet the Safe Harbor requirement to avoid any penalties.

wfrobinette
Posts: 677
Joined: Fri Feb 20, 2015 3:14 pm

Re: IRS announces new withholding tables for 2018

Post by wfrobinette » Fri Jan 12, 2018 3:04 pm

Ice-9 wrote:
Thu Jan 11, 2018 4:22 pm
We had significant itemized deductions before, but we're pretty sure we will be taking the standard deduction in 2018. I'm guessing I'm at risk of withholding too little. Need to look at this, thanks for the reminder...
I'm waiting for the the new w-4 calculator as I am losing 8k in deductions to the SALT limits and claim 7 allowances for 3 people.

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Fri Jan 12, 2018 3:14 pm

wfrobinette wrote:
Fri Jan 12, 2018 3:04 pm
Ice-9 wrote:
Thu Jan 11, 2018 4:22 pm
We had significant itemized deductions before, but we're pretty sure we will be taking the standard deduction in 2018. I'm guessing I'm at risk of withholding too little. Need to look at this, thanks for the reminder...
I'm waiting for the the new w-4 calculator as I am losing 8k in deductions to the SALT limits and claim 7 allowances for 3 people.
The one linked in this post seems good for our situation, but it's not the IRS version.

User avatar
grabiner
Advisory Board
Posts: 22699
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: IRS announces new withholding tables for 2018

Post by grabiner » Fri Jan 12, 2018 7:05 pm

BrandonBogle wrote:
Fri Jan 12, 2018 2:59 pm
Honestly, I'm planning to use the same method I've done the past couple years. I change nothing on my W4 until I do my taxes. Then I take last year's tax owed, subtract whatever has already been withheld from my paychecks, and divide by the remaining number of paychecks for the year. I then mark 10 exemptions or some other really high amount and put the result of the above calculation as additional withholding.

This works for me because my income is generally stable from year to year and by meeting last year's minimum, I meet the Safe Harbor requirement to avoid any penalties.
That may not be a good idea this year because your 2018 taxes will be very different from your 2017 taxes. If you choose to withhold as much in 2018 as you paid in 2017, you may get a big refund.

(Conversely, if you claim the same number of allowances in 2018 as you had in 2017, you may get either a big tax bill or a big refund, depending on what happens with your deductions and credits; you should file a new W-4 when the form and worksheets come out.)
Wiki David Grabiner

User avatar
BrandonBogle
Posts: 2097
Joined: Mon Jan 28, 2013 11:19 pm

Re: IRS announces new withholding tables for 2018

Post by BrandonBogle » Sat Jan 13, 2018 1:52 am

grabiner wrote:
Fri Jan 12, 2018 7:05 pm

That may not be a good idea this year because your 2018 taxes will be very different from your 2017 taxes. If you choose to withhold as much in 2018 as you paid in 2017, you may get a big refund.
In 2018, I only have $150 of carryover losses left, so I’ll have roughly $3k more income at least, so it will all probably balance out for in my case.

Had the carryover not applied before or I had enough to roll to 2019, I imagine I would have to sit down and revisit the numbers. The estimaters I used in late December showed roughly the same tax due or a slight increase based on being single at my income level. But some of the various estimators were also wildly different, so I didn’t put too much faith in them.

Dead Man Walking
Posts: 698
Joined: Wed Nov 07, 2007 6:51 pm

Re: IRS announces new withholding tables for 2018

Post by Dead Man Walking » Sat Jan 13, 2018 3:00 am

I plan to use the new charts to calculate my taxes for 2018 after I receive my February pension check. I plan to calculate my taxes so that I owe a small amount. If someone files a fraudulent tax return and receives a refund using my identity, that would be an IRS problem. This scenario would probably be a pita for me in any case, but it would not be a financial crisis.

DMW

User avatar
darkhorse346
Posts: 178
Joined: Sat Jan 10, 2015 5:53 am

Re: IRS announces new withholding tables for 2018

Post by darkhorse346 » Sat Jan 13, 2018 5:00 am

At the time of this post, the IRS has taken down the withholding tables from their site.

https://www.irs.gov/pub/irs-pdf/n1036.pdf

deskjockey
Posts: 156
Joined: Sat Dec 03, 2016 11:15 am

Re: IRS announces new withholding tables for 2018

Post by deskjockey » Sat Jan 13, 2018 6:20 am

darkhorse346 wrote:
Sat Jan 13, 2018 5:00 am
At the time of this post, the IRS has taken down the withholding tables from their site.

https://www.irs.gov/pub/irs-pdf/n1036.pdf
Not sure what you mean--they're still on the IRS site as of when I'm typing this post, as is the press release announcing them:

https://www.irs.gov/newsroom/news-relea ... rent-month

leftcoaster
Posts: 327
Joined: Mon Jul 23, 2007 4:04 pm

Re: IRS announces new withholding tables for 2018

Post by leftcoaster » Sat Jan 13, 2018 7:10 am

deskjockey wrote:
Sat Jan 13, 2018 6:20 am
darkhorse346 wrote:
Sat Jan 13, 2018 5:00 am
At the time of this post, the IRS has taken down the withholding tables from their site.

https://www.irs.gov/pub/irs-pdf/n1036.pdf
Not sure what you mean--they're still on the IRS site as of when I'm typing this post, as is the press release announcing them:

https://www.irs.gov/newsroom/news-relea ... rent-month
The pdf is not available

User avatar
pfrank
Posts: 138
Joined: Thu Jan 15, 2009 9:42 am

Re: IRS announces new withholding tables for 2018

Post by pfrank » Sat Jan 13, 2018 9:27 am

leftcoaster wrote:
Sat Jan 13, 2018 7:10 am
deskjockey wrote:
Sat Jan 13, 2018 6:20 am
darkhorse346 wrote:
Sat Jan 13, 2018 5:00 am
At the time of this post, the IRS has taken down the withholding tables from their site.

https://www.irs.gov/pub/irs-pdf/n1036.pdf
Not sure what you mean--they're still on the IRS site as of when I'm typing this post, as is the press release announcing them:

https://www.irs.gov/newsroom/news-relea ... rent-month
The pdf is not available
Use this link instead: https://www.irs.gov/pub/irs-prior/n1036--2018.pdf

User avatar
Artsdoctor
Posts: 3504
Joined: Thu Jun 28, 2012 3:09 pm
Location: Los Angeles, CA

Re: IRS announces new withholding tables for 2018

Post by Artsdoctor » Sat Jan 13, 2018 10:23 am

I believe the IRS has warned that the tables may not be accurate and it will be up to employees to double-check the math. The way to double-check the math, does not yet exist, but perhaps it will in the near future.

https://www.washingtonpost.com/business ... story.html

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Sat Jan 13, 2018 10:44 am

Artsdoctor wrote:
Sat Jan 13, 2018 10:23 am
I believe the IRS has warned that the tables may not be accurate and it will be up to employees to double-check the math. The way to double-check the math, does not yet exist, but perhaps it will in the near future.

https://www.washingtonpost.com/business ... story.html
Paywall blocked the linked article, but one might suspect
- the tables are accurate. In other words, if one declares a filing status and a certain number of W-4 allowances, the amount withheld will be what the tables suggest.
- the number of allowances one needs to declare under the 2018 tax law may differ from the number one needed to declare under 2017 law, in order to achieve the same tax due or refund when filing.

User avatar
grabiner
Advisory Board
Posts: 22699
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: IRS announces new withholding tables for 2018

Post by grabiner » Sat Jan 13, 2018 11:42 am

FiveK wrote:
Sat Jan 13, 2018 10:44 am
Artsdoctor wrote:
Sat Jan 13, 2018 10:23 am
I believe the IRS has warned that the tables may not be accurate and it will be up to employees to double-check the math. The way to double-check the math, does not yet exist, but perhaps it will in the near future.

https://www.washingtonpost.com/business ... story.html
Paywall blocked the linked article, but one might suspect
- the tables are accurate. In other words, if one declares a filing status and a certain number of W-4 allowances, the amount withheld will be what the tables suggest.
- the number of allowances one needs to declare under the 2018 tax law may differ from the number one needed to declare under 2017 law, in order to achieve the same tax due or refund when filing.
I can read the article, and confirmed this. What follows is not from the article but my own explanation.

Taxpayers who itemized deductions in 2017 will be underwithheld in 2018 if they use the old withholding allowances. A married couple which had $24,850 in itemized deductions in 2017 should have claimed three extra withholding allowances, since the W-4 worksheet gave the correct withholding for the $12,700 standard deduction. In 2018, this couple will probably take the standard deduction and needs three fewer withholding allowances; without the adjustment, the couple will have a tax bill equivalent to the tax on the $12,450 which is three 2018 allowances. (This might even be enough to cause a penalty for underwithholding.)

Taxpayers in low tax brackets who claim the child tax credit will be overwithheld in 2018 if they do not change their withholding. In the 12% bracket, one withholding allowance results in a tax reduction of 12% of $4150, which is $498. The correct tax reduction is $1000 (the 2018 increase in the child tax credit), which should be two withholding allowances. In the 24% bracket, this happens not to be a problem; one allowance results in $996 less withheld, and the tax credit is $1000.

The new W-4 worksheet should adjust for these things. The worksheet for itemized deductions does not need to change, but will need to be recalculated, as you claim allowances based on how much your itemized deductions exceed the standard deduction. The child tax credit would be handled by eliminating the adjustment for dependents, and changing the line for the credit: "If your income is less than $XX,XXX, add 2 for each child for whom you will claim the child tax credit, and 1 for every two other dependents. If your income is between $XX,XXX and $YYY,YYY, add 1 for each child, and 1 for every four other dependents."
Wiki David Grabiner

rkhusky
Posts: 5547
Joined: Thu Aug 18, 2011 8:09 pm

Re: IRS announces new withholding tables for 2018

Post by rkhusky » Sat Jan 13, 2018 4:51 pm

pfrank wrote:
Sat Jan 13, 2018 9:27 am
Use this link instead: https://www.irs.gov/pub/irs-prior/n1036--2018.pdf
New file size is quite a bit smaller, but seems to have the same info.

adamsapple19
Posts: 33
Joined: Mon Dec 19, 2016 4:45 pm
Location: Colorado

Re: IRS announces new withholding tables for 2018

Post by adamsapple19 » Sat Jan 13, 2018 7:11 pm

Per the below, a single person (in a simple one-job/nothing special situation) would need to update their current W4 withholdings (from 1) to 2 per the below?

"...filers with no dependents, only one wage income, standard deduction, and no other income, credits, etc., filing "Single with 2 Allowances" or "Married with 3 Allowances" (as applicable) will withhold exactly the amount of federal tax due." - From: MMM

I've been operating under the assumption a single person would claim just one, per the below from Investopedia:

"You can claim one allowance for yourself, one for your spouse and one for each of your dependents."

So, effective this year (for 2019 tax filings) every "single person/nothing special" situation person would need to adjust their withholdings to 2 from 1 to stay on par from previous years as a result of the tax changes and subsequent IRS withholding modification? Or, am I missing something?

User avatar
FiveK
Posts: 5597
Joined: Sun Mar 16, 2014 2:43 pm

Re: IRS announces new withholding tables for 2018

Post by FiveK » Sat Jan 13, 2018 7:21 pm

adamsapple19 wrote:
Sat Jan 13, 2018 7:11 pm
So, effective this year (for 2019 tax filings) every "single person/nothing special" situation person would need to adjust their withholdings to 2 from 1 to stay on par from previous years as a result of the tax changes and subsequent IRS withholding modification?
Edit: The "single person/nothing special" situation remains filing 2 allowances on a 2018 W-4, the same as for a 2017 W-4.
Last edited by FiveK on Sun Jan 14, 2018 1:45 am, edited 1 time in total.

Post Reply