So who’s ready for a fatter paycheck starting next month?
New withholding rules mean more money in your pocket
The Internal Revenue Service is out with new withholding tables for companies to follow when calculating your paycheck going forward. Employers may begin using these tables immediately, though they have until Feb. 15 before they’re required to do so.
Yahoo! Finance crunched the numbers from the tables and the verdict is in: Most taxpayers will see more money in their take-home pay.
You’re probably wondering when you’ll see this extra cash in your check…
“The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid — generally weekly, biweekly or monthly,” the IRS writes online.
The new withholding tables take into account a variety of changes brought about by the passage of the GOP’s revamped tax code. Among those changes are an increase in the standard deduction, new tax brackets and more.
The goal of the new withholding tables is to help workers avoid a situation where they’re either having too much or too little taken out of their checks each time they get paid.
According to money expert Clark Howard, it’s that first scenario that’s the greater of the two evils.
“People try to justify their tax refunds by saying it’s a way to force themselves to save money,” the consumer champ says. “But getting a giant tax refund means you’ve made an interest-free loan to the government and your money has been working for them — not you — all year-long.”
To help you get as close to withholding parity as possible, the IRS has long made a withholding tax calculator available.
Currently, the IRS is revising that tool to reflect the most recent tax law changes. It expects to have the latest and greatest calculator available by the end of February.