Six (6) Tax Law Changes that could affect your payroll withholdings

Brown gavel on a white tax law document

Those who claimed allowances for itemized deductions under prior law should claim fewer allowances in 2018 for itemized deductions—even if they no longer itemize.

  • Tax rates have decreased in general
  • Standard deductions have almost doubled:
    • Single: $6,350 → $12,000
    • Head of Household: $9,350 → $18,000
    • Married-Joint: $12,700 → $24,000
  • Exemptions are eliminated
  • Child Tax Credit increased from $1,000 to $2,000/child and eligibility expanded
  • New credit for other dependents of $500/dependent is added
  • Changes are made to allowable itemized deductions

Use the Withholding Calculator and determine if you need to fill out a new Form W-4 with your employer(s). Some of its features are:

  • It allows for other types of income and offsets to income.
  • It accounts for withholding-to-date (e.g., mid-year).
  • It accounts for part-year jobs.
  • It prevents users from entering unallowableor inconsistent amounts.
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