Thursday the IRS released Notice 1036 updating the income-tax withholding tables. This is the result of the Tax Cuts and Jobs Act enacted in December. The 2018 withholding tables are just the first in a series of future updates they will improve the accuracy of 2018 withholdings. Here is what your business needs to know about the new 2018 withholding tables released by the IRS.
The IRS Releases New 2018 Withholding Table
Implementation of 2018 Withholding Table
Before implementing the 2018 withholding tables business should continue to use the 2017 guidelines. However, you should switch to the new 2018 withholding tables as soon as possible, but no later than February 15th.
Future Form W-4 Revisions
Notice 1036 will help to minimize the burden on taxpayers and employers. At this time employees are not required to do anything. But IRS is planning to revise Form W-4 later on this year because this form is ultimately used to determine how much your employee’s paychecks are withheld toward income taxes.
2017 Vs. 2018 Withholding Table
The Tax Cuts and Jobs Act passed last month made several changes to the established tax plan including the repeal of personal exemptions, an increase in standard deductions, and updates in tax rates and brackets.
2018 Withholding Table Details
- Employee portion of Social Security: 6.2% with a taxable wage of $128,400
- Employee portion of Medicare: 1.45% with no wage base limit
- Medicare Surtax: .9% which exceeds $200,000 or $250,000 for married taxpayers
Guaranteed Tax Compliance
Comment below with any question for our experienced tax specialists. If your business still needs to file their ACA reporting and compliance forms, use ACAWise as your full-service solution. Provide the information you have on your employees’ insurance coverage and our variable-rate software will take care of the rest. Based on your information we will make sure the right codes are in place before e-filing your ACA Forms.