Tax reform: IRS, Treasury take first step toward raising your paycheck

The IRS and U.S. Treasury Department released new withholding guidance on Thursday, indicating that employees should see the tax reform changes reflected in their paychecks by next month.

“With this guidance, most American workers will begin to see bigger paychecks. We estimate that 90% of wage earners will experience an increase in their take home pay,” said U.S. Treasury Secretary Steven Mnuchin in a press release.

New withholding tables needed to be issued in order to reflect the changes to tax rates, tax brackets, the elimination of personal exemptions and an increased standard deduction under the new law, passed by the GOP in December. Employers and payroll companies will now be required to process and implement those changes.

Even though the new tables are out, the time it takes for employees to see the change reflected in their paychecks will vary.

As previously reported by FOX, employers using a big payroll processing firm may have an easier time with the transition, while employees at small businesses or other companies may have to wait a bit longer for the changes to be fully implemented.

How frequently employees are paid will also affect how quickly they see the benefits.


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