Getting A Tax Break From the IRS

         It has been stated many times on this blog and from many other Tax news sources, the Tax Cuts and Jobs Act (TCJA) has been a game changer. Even basic calculations now need to be looked in a different way. Nothing will be done the same way. One example is tax withholding and estimated payments.
          In general, when it comes to tax withholding from paychecks, things are very simple. A Form W-4 is filled out and given to your employer and that determines how much in taxes are withheld from your wages earned. However, when the TCJA went into effect, the withholding tables were adjusted, which meant less would be held from your pay. Most people saw an increase in wages last year. The real reasons for this were a suspension of certain exemptions and deductions.
          What many Taxpayers may not have realized is that they needed to submit a revised W-4 to make sure their estimated tax payments were correct. Not many were aware of this. As a result, while refunds will be issued to many, some will be surprised to find out they owe taxes. Considering these factors and the fact that the IRS is not fully functional during the current partial Federal Government shutdown, Taxpayers are being given a break. The penalty for those who did not withhold or estimate their tax appropriately will be waived for this year. This will apply for those who paid at least 85% of their tax liability, not the usual 90%. Only time will tell how many Taxpayers this will benefit. We at Anthony Sykes and Company are here to help you navigate this new tax landscape. Please contact us to make an appointment to discuss how to make the best choices for you and your business.

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