timberland pro 105 Americans to see increase in paychecks under new tax law
“I have heard time and again that the middle class is getting crumbs, but I’ll take it!” Love said by email.
Julia Ketchum, a secretary at a public high school in Lancaster, Pennsylvania, said she was pleasantly surprised her pay went up $1.50 a week. She didn’t think her pay would go up at all, let alone this soon. That adds up to $78 a year, which she said will more than cover her Costco membership for the year.
And Todd Anderson of Texas and his fiance, who are both educators, got an extra $200 in their paychecks combined that they plan to use to cover the costs of a second baby on its way.
According to the nonpartisan Tax Policy Center, a middle income household would on average get a tax cut of $930 this year,
lifting their after tax income by about 1.6 percent. That increase won’t be perfectly reflected in their paycheck though.
That’s because lower tax withholding on paychecks is just a piece of a complicated set of changes to tax law that the GOP pushed through in December. And what your employer withholds is based on an estimate of your tax obligation that includes many complex factors, but it’s not a perfect measure.
As a result, taxpayers may find they are unintentionally over or underwithholding for their taxes if they don’t do some legwork.
Senator Ron Wyden, on the Senate Finance Committee, and Rep. Richard Neal, on the House Ways and Means Committee, both Democrats, have asked the Government Accountability Office to analyze the new tables to make sure workers’ paychecks weren’t being systematically underwithheld, which would make paychecks bigger now but lead to a bigger bill at tax time. Mnuchin, speaking at a White House press briefing, dismissed this notion as “ridiculous.”
experts suggest that all taxpayers take a look the new IRS calculator when it becomes available later in February to ensure they are having the correct amount withheld. And they should update the information on their W 4 after the IRS releases a revised version later this year.