The IRS has released a new version of Form W-4 and its online withholding calculator. They encourage taxpayers to use the new calculator to perform a quick “paycheck checkup.” This is very important in 2018 because of recent changes to the tax laws in the Tax Cuts and Jobs Act.
The changes increased the standard deduction, removed personal exemptions, increased the child tax credit, limited or discontinued certain deductions, and changed the tax rates and brackets, among other things.
Checking withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. At the same time, with the average refund topping $2,800, taxpayers may prefer to have less tax withheld up front and receive more in their paychecks.