Close
Close

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

RFP
Tax Hot Topics newsletter The IRS has updated its online withholding calculator and Form W-4 for 2018 at https://www.irs.gov/individuals/irs-withholding-calculator 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


Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.