IRS provides new withholding calculator and Form W-4 for 2018

Tax Hot Topics newsletter The IRS has updated its online withholding calculator and Form W-4 for 2018 at to reflect changes from the tax reform legislation enacted at the end of 2017. The new law makes a number of changes for 2018 that affect individual taxpayers. These changes include an increase in the standard deduction, repeal of personal exemptions, an increase in the child tax credit, limits or discontinuance of certain deductions and changes in tax rates and brackets.

Individuals with more complicated financial situations will be more likely to use the calculator and change their withholding for 2018 than those individuals with simple situations. More complicated situations include families with multiple earners, individuals who work multiple jobs concurrently, individuals with children who claim credits such as the child tax credit, individuals who itemized deductions in 2017 and high-income individuals with more complex tax returns. The calculator gives employees the information they need to fill out a new Form W-4 to submit to their employer.

No substantive changes have been made to the Form W-4 itself between 2017 and 2018. However, substantive changes have been made to the instructions and worksheets accompanying the form. Employees should use the new withholding calculator to confirm their proper tax withholding and to avoid excess or insufficient tax withholding from their paychecks. Entering fewer withholding allowances generally results in higher employee tax withholding. Employees should submit withholding amount changes to their employers as soon as possible using the new Form W-4.

Contact Eddie Adkins
Partner, Washington National Tax Office
T +1 202 521 1565

Jeffrey Martin
Partner, Washington National Tax Office
T +1 202 521 1515

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