In the wake of the Tax Cuts and Jobs Act, IRS released both a new Withholding Calculator and an updated Form W-4. The new calculator provides employees with information they need to include on the new Form W-4 in the event that employees need to make changes to their withholding. The new withholding changes do not affect 2017 tax returns due in April.
IRS recommends for the following groups of taxpayers to check their withholding:
- Two-income families;
- People with two or more jobs at the same time or who only work for part of the year;
- People with children who claim credits such as the Child Tax Credit;
- People who itemized deductions in 2017; and
- People with high incomes and tax returns that are more complex.
The agency suggests taxpayers with more complex situations use Publication 505, Tax Withholding and Estimated Tax, instead of the Withholding Calculator. IRS expects to release this update on IRS.gov by early spring.