New paycheck rules for millions leave employers scrambling

[mystery-ak]

New paycheck rules for millions leave employers scrambling

By BRIAN FALER

12/20/2017 05:54 PM EST

Republicans’ tax overhaul will completely change the way employers figure out how to withhold income taxes from millions of Americans’ paychecks, potentially disrupting payroll departments as they figure out how to switch to the new system with little guidance and just days to spare.

As of Jan. 1, the Republican plan dumps the entire concept of personal exemptions that workers now use to calculate how much should be taken from their pay on the tax forms known as W-4s. That means forms could need to be rewritten, and millions of workers will need to submit new ones. At the same time, the GOP plan doesn’t specify exactly what should happen, leaving it to the IRS to figure out.

The vagueness about withholding is one of the casualties of Republicans’ rush to push their plan through Congress and into law so its combination of individual and business tax cuts can boost the economy ahead of next year’s midterm elections. That lack of detail may mean workers may not see changes in their paychecks as quickly as some lawmakers are suggesting.

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https://www.politico.com/story/2017/12/20/new-paycheck-rules-tax-bill-leave-employers-scrambling-252542?lo=ap_d1

[driftdiver]

Well you do have all of next year to make adjustments to the withholdings
  good grief.

[txradioguy]

Why does the phrase "we need to pass it to know what's in it" come to mind.

[Restored]

The new withholding tables need to be sent out quickly. I'm due back about $2k this year. You can get fined for having a large refund.

[driftdiver]

Why does the phrase "we need to pass it to know what's in it" come to mind.

The contents of the bill were known, they just werent agreed too until the very end and kept changing.  Hardly an equal comparison to Obamacare.

[txradioguy]

The contents of the bill were known, they just werent agreed too until the very end and kept changing.  Hardly an equal comparison to Obamacare.

Except that it is.  They were in such a rush to pass something...anything with a tax cut associated...that they didn't finish important pieces like the W-4 issue.

[driftdiver]

Except that it is.  They were in such a rush to pass something...anything with a tax cut associated...that they didn't finish important pieces like the W-4 issue.

Except that it isn't.

Pelosi and Reid kept the content of the Obamacare bill back and those voting on it didn't even have the text.    This bill is the product of deal making, like many bills and as a result things were going in and out until the last minute.

Yes Congress should have done this 6 months  ago.   Why are you so friggen sad that something good was passed?  Do  you hate Trump that much that you'd prefer the country burn to the ground rather than him have a success?

[driftdiver]

The new withholding tables need to be sent out quickly. I'm due back about $2k this year. You can get fined for having a large refund.

Well you do have the full year to make adjustments.

[thackney]

You can get fined for having a large refund.

Are you sure about that?  What is considered too large?

[dfwgator]

Are you sure about that?  What is considered too large?

You get fined if you owe too much,  technically taxes are due quarterly.

[Right_in_Virginia]

The new withholding tables need to be sent out quickly. I'm due back about $2k this year. You can get fined for having a large refund.

The tax reform bill is effective Jan 1, 2018 ... it has nothing to do with tax withholding tables in 2017 @Restored

[Restored]

2018 happens in a few days.

[thackney]

You get fined if you owe too much,  technically taxes are due quarterly.

Yes, that is fined for underpayment.  The claim was fine for overpayment.  I do not believe that is true.

[Restored]

Actually, you don't get a fine for a large refund, you just might not get it for a while. A few years, they have frozen refunds.

You get fined for owing too much.

[Right_in_Virginia]

2018 happens in a few days.

Yes, I know.  The new tax tables should be up and running by February.

But, I'm confused about what this has to do with the 2017 tax year @Restored

[thackney]

2018 happens in a few days.

But the new law gives them a full year to make the changes to withholding methods.  They will want to do it sooner, to get credit earlier than next year.

[IsailedawayfromFR]

The new withholding tables need to be sent out quickly. I'm due back about $2k this year. You can get fined for having a large refund.

I never heard about that.  Source?

[Oceander]

The tax reform bill is effective Jan 1, 2018 ... it has nothing to do with tax withholding tables in 2017 @Restored

Uhh, that would be the tax withholding tables that are used for 2018, genius.  Employers will need to know how much to withhold from each dollar paid starting January 1, 2018. 

[Oceander]

Yes, I know.  The new tax tables should be up and running by February.

But, I'm confused about what this has to do with the 2017 tax year @Restored

You’re confused on a lot of things.  The withholding tables apply to wages paid in 2018, not to taxes in 2017. 

[Cyber Liberty]

Aren't most companies using software to run their payrolls these days?

[Oceander]

Aren't most companies using software to run their payrolls these days?

The software implements the withholding rules promulgated by the IRS.  Since the personal exemption is gone and the standard deduction is increased significantly, new withholding rules need to be issued.  New Forms W-4 will also have to be developed and then completed by the employees.  Without new W-4s, withholding will be done at the highest rate. 

[driftdiver]

The software implements the withholding rules promulgated by the IRS.  Since the personal exemption is gone and the standard deduction is increased significantly, new withholding rules need to be issued.  New Forms W-4 will also have to be developed and then completed by the employees.  Without new W-4s, withholding will be done at the highest rate.

According to my payroll company the withholding will stay the same until the new rates/forms are released.   So whatever you had being  withheld before will be the same for January.  Its really not that big of a deal.

[Sanguine]

 888ohnoes 888ohnoes

[driftdiver]

Seems really really strange that all these "super" conservatives who reject Trump because he's so awful are upset and nit pickin about a tax cut.

What is bad about a tax cut?

[Cyber Liberty]

Seems really really strange that all these "super" conservatives who reject Trump because he's so awful are upset and nit pickin about a tax cut.

What is bad about a tax cut?

Seems to me that any change in the tax code would be creating this "situation."  With the exception of the legal and CPA peoples concerns, it's an odd complaint....

Maybe it would have been less disruptive had it been done earlier in the year?