house of fraiser bags New tax bill may affect your paycheck as soon as February
“Everyone will be impacted by the taxes changes that took place, it’s just how,” says Heather Fuller, a Tax Expert with H Block. “Since that entire system is being changed we may easily see an increase in what you’re bringing home every week or a slight decrease in what you’re bringing home depending on how you have your withholdings statement, which is called a W4, filled out with your employer.”
So let’s start with what’s the same. There will still be seven tax brackets, but the income tax rates have been lowered. Another big change is standard deductions. Filing this year, an individual will have a standard $6,350 deduction next year that nearly doubles to $12,000. It goes from $12,
700 to $24,000 dollars for joint filers.
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Also disappearing? The $4,050 personal exemption that was allowed for yourself, your spouse and each of your children.
“A married couple or even a single person with four or five exemptions on their W4 currently and that those exemptions are the reason they’re not having a significant portion taken out of their paycheck that’s definitely going to be impacted. They would potentially see less in their paychecks because that was where they were getting the majority of their savings, the money coming into their paycheck, versus being held out for taxes they would need to hold more out because those exemptions no longer exist.”
What’s important to remember, “each tax return is like a snowflake, they’re all unique,” says Fuller, so we won’t know the impacts until each person looks at their full financial picture.
The bottom line that taxpayers and preparers are all waiting for is the “Withholdings Chart” from the IRS,
which will determine how each of our withholdings are affected. That chart is expected to be realized by the IRS in February.