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Treasury Secretary Expects About 90% of Workers to See a Pay Raise From Tax Cut

Taxes

Treasury Secretary Expects About 90% of Workers to See a Pay Raise From Tax Cut

US Treasury Secretary Steven Mnuchin said the government expects about 90% of workers to see an increase in their take-home pay due to the recently announced tax cut

The Treasury Department on Thursday released the new updated withholding tables for the new tax law. The tables lay out how much tax to withhold or not withhold from paychecks. With these new guidelines, companies can start adjusting employee paychecks. While employers can begin doing this voluntarily, they will have to comply with the new guidance by Feb. 15th, 2018.

The new tax law makes a number of changes for 2018 that impact individual taxpayers. The new tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets.

The Treasury also said that employers with bonuses should withhold 22 percent for taxes as opposed to the current rate of 25 percent. This rate would apply to the special bonuses distributed following the passage of tax overhaul.

The IRS  said it is working on a new W-4 form, which a number of workers will have to fill out in order to benefit from the changes in 2019.

For anyone with questions, the IRS created a FAQ about Withholding Tables

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