How to Withhold Income Tax... For Now

         As we have discussed in previous posts, the new version of Form W-4 will not go into effect until 2020 at the earliest. When the draft was proposed, it created much uncertainty and with time those privacy concerns will be addressed. In the meantime, withholding cannot continue the same as it has been. The form may be similar, but the law has changed.

          The IRS guidance in the area does take into consideration the changes made by the Tax Cuts and Jobs Act. There is an allowance to consider Qualified Business Income (QBI) as a deduction for those who meet the requirements found in Section 199A. To not get surprised by a withholding error that may cost a large amount of money, it is good to speak to a Qualified Tax Professional in order to make the necessary adjustments in your paycheck.

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