Tax overhaul could mean major changes to your paycheck

Stock image, St. George News

SALT LAKE CITY — If Republicans succeed in passing a tax overhaul by Christmas, the law could mean major changes for your take-home pay – not all of them welcome.

But those changes probably won’t be reflected in your paycheck in time for the New Year, according to a report from Fox13Now.

The American Payroll Association, whose members represent 17,000 employers, warned lawmakers Monday that they were creating a “herculean task” for companies and payroll service providers by leaving them such a short time to start implementing the new provisions, which would take effect on January 1, 2018. A letter from the APA said the following:

Our members are already starting to panic, on behalf of themselves and millions of employees, about the effect on 2018 withholdings of a tax bill that will be effective a week after its enactment.

Late-year tax changes by Congress have become something of a holiday tradition in the past decade of partisan gridlock. But this year is different.

That’s because the tax overhaul would make fundamental changes to gauging how much tax should be withheld from your paycheck so that you’re not left with a big tax bill when you file your federal return.

Both the tax bill passed by the House and the one passed by the Senate would double the standard deduction and eliminate personal exemptions. They also would change the income tax brackets and alter various family credits.

In addition, some of the once tax-free workplace benefits may become taxable wages.

And there may be changes to how much federal tax is automatically withheld on any bonus, commission or other “supplemental wages.” They’ve been taxed at 25 percent since 2007, but that rate may go up to 28 percent under a new tax law, the APA said.

The changes in your paycheck, though, won’t be immediate. Figure not until at least late January.

Read the full story here:  Fox13Now.com.

Written by ASHTON EDWARDS, Fox13Now.com with contributions from CNN wire services

Copyright 2017, KSTU. A Tribune broadcasting station

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7 Comments

  • Sapphire December 12, 2017 at 11:03 am

    Herculean task? Every year employees should be filling out a new W-4 after deciding how much they want taken out of their checks…. this is not up to employers. Employees decide on deducting all members of family to break even, some members of family to get a refund, or more deductions if they are sure they will be getting a refund because of lower income. The hardest hit will be large families because the extra standard deduction only equals 3 household members where before it was $4050 per person regardless of the number. These maybe, could be, might be, shoulda, woulda articles just upset people and serve no real purpose.

    • bikeandfish December 13, 2017 at 2:31 pm

      I believe they are talking about the task facing payroll companies that actually have to take the new tax data and create new algorithms so the employees paycheck deductions are accurate for the tax year. Its not exactly an easy task in a matter of days. There is a reason that tax law was historically decided upon earlier in the year.

      It will also take some time for people to decide what deductions to take on their paychecks to account for their household budgets. Most of America is living paycheck to paycheck so a bi-weekly loss of even $50-100 can be detrimental. Given paycheck deduction calculations aren’t normally disclosed by the employer it can take some trial and error to get it right.

      • Sapphire December 14, 2017 at 6:18 pm

        Well, having done payroll when I worked, I just don’t see the big deal… the tax rates change every year and you just enter them in the payroll software and go to it? And the yearly W-4 was designed to help you figure out what deductions to take. So I still don’t get it. We still have the same tax deductions on our paychecks. It is the IRS 1040 filing that will change.

  • DRT December 12, 2017 at 2:39 pm

    “These maybe, could be, might be, shoulda, woulda articles just upset people and serve no real purpose.”
    I disagree with this statement. These articles are designed to keep people stirred up.
    They are also designed for sensationalism.
    The MSM is really interested in ratings, because ratings = money to them.

  • jaybird December 12, 2017 at 8:15 pm

    Figure it out. A family of 5, 3 kids, 2 adults. Get a $24,000 standard deduction, take away $20,000 in personal exemptions. Add to the 8ncome, take more taxes out. Get real. This is a big scam.

  • jaybird December 12, 2017 at 8:19 pm

    And Hatch says there is not enough $ to pay for Childrens Health Insurance Plan while giving corporations THE LARGEST TAX CUT IN HISTORY while they are making RECORD PROFITS. PEOPLE SHOULD BE UPSET!

    • ladybugavenger December 13, 2017 at 6:22 am

      Of course, it upsets me. What also upsets me is that walmart makes 484 billion dollar revenue, the walton kids make billions of dollars a year and a high amount of walmart workers rely on food stamps. Id go as far as saying that walmart has the highest number of employees on government assistance. Seems like a fraud, doesn’t it?

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