The IRS is strongly encouraging taxpayers who typically itemize deductions to preform a “paycheck checkup” by using the Withholding Calculator to ensure their employers are withholding the approprate amount of tax from their paychecks. The Tax Cuts and Jobs Act changes are effecttive in 2018 and affect the tax returns filed in 2019. The new law makes a number of major changes, inculding:
- Limiting the deductions for state and local taxes
- Limiting the deduction for home mortgage interest
- Eexcluding deductions for employee business expeneses, tax preparation fees, and investment expenses
The Tax Cuts and Jobs Act nearly doubled the standard deductions and changed several itemized deductions. Regardless of whether the taxpayer itemize deductions or decides to take the standard deduction it could affect how much tax will need to be withheld from their paycheck. Having too little tax withheld could result in an unexpected tax bill or penalty at tax time in 2019.
Click here for complete details.