Many Americans have seen bigger paychecks in recent weeks because of changes to how much employers are withholding for the government.
Due to the GOP tax law changes that went into effect in January, the Internal Revenue Service released new guidelines on how much employers should withhold for taxes from their employees' paychecks on Jan. 11.
The Treasury Department estimates 90 percent of wage earners will see an increase in take-home pay due to the change.
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The guidance said employers were to begin using new 2018 withholding tables as soon as possible, but no later than Feb. 15. That deadline meant many people saw a bump in their pay in the past two weeks.
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The new law makes a number of changes for 2018 that affect individual taxpayers, according to the IRS, and the new tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets.
For people with simpler tax situations, the new tables are designed to produce the correct amount of tax withholding. The revisions are also aimed at avoiding over- and under-withholding of tax as much as possible.
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This could mean a smaller return when you file 2018 taxes, because less money was withheld throughout the year. For some people it could mean they owe money back at the end of the tax year.
To help people determine their withholding, the IRS is revising the withholding tax calculator on IRS.gov. Taxpayers are encouraged to use the calculator to adjust their withholding.
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