(202) 224-4515 Katie Niederee, Julia Lawless
Tax Reform: The Proof is in the Paycheck
The new tax law was crafted to provide middle-class tax relief and lower individual taxes across the board. To reflect the new law, the IRS rolled out new withholding tables last month, giving employers until February 22 to implement the changes. So if they haven’t already, most Americans will soon see bigger paychecks thanks to tax reform.
Check out some of the headlines about workers across the country seeing boosts to their paychecks:
Notice a little extra cash in your most recent paycheck? It wasn't a glitch and provided nothing changes in your work or tax status, you can count on these slightly cushier amounts for the time being. It's all a result of the new tax bill and the IRS' revised withholding tables.
Many workers could see a bump in their take-home pay as employers start using the new IRS income tax withholding tables. The Congressional Budget Office estimates employers are likely to withhold $10 billion to $15 billion less from workers every month as a result of those tables.
Those whose employers were quick to make the change welcomed the extra money — anywhere from a few dollars to a few hundred dollars. Wayne Love, who works in managed care in Spring Hill, Florida, got an extra $200 in his paycheck last week, which he said will help offset a $300 increase in the cost of his health insurance.
Most Americans are starting to see one of the early benefits of the new tax law: a bump in take-home pay. Paychecks are increasing for about 90 percent of Americans due to the tax overhaul, according to the U.S. Treasury, a result of changes in withholding tables set by the IRS. The deadline for all employers to make the adjustments in paychecks [was last] Thursday. So while some workers have already seen the increases, others will see their first sweetened checks this week or next.
Sanders Offner has had good news for most clients calling lately with questions after noticing a higher-than-usual take-home pay. It wasn't a mistake. "The phone calls that we get primarily are because the employees think that something's wrong with their paycheck," said Offner, president and co-owner of Metairie-based Crescent Payroll Solutions. "I think 99 percent of the time it's a call that's in their favor." All told, the hard-fought tax overhaul that dominated the national dialogue in recent months is now beginning to deliver a change that many will welcome — bigger paychecks.
Collier Merrill owns several businesses in the Pensacola area, like the Fish House and Atlas. When President Trump's changes came into play, so did a change to his employee's paychecks. This came as a surprise.
Like workers throughout Greater Cincinnati, Flynn will keep more of his income because lawmakers in Washington reformed the nation's tax code. "Any time we get more money in our paychecks as opposed to the government having an opportunity to spend it, I like it," Flynn said.
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