Total_HCM_Product_Guide_Landscape

Total HCM Product Guide

One unified cloud platform to help you manage your entire workforce.

Free Product Guide

Why the IRS is Encouraging a Paycheck Audit

8/14/18, 10:36 AM

 

Recently the Internal Revenue Service (IRS) released a reminder about employee tax withholding, a paycheck audit. Due to changes in tax law, the IRS encourages employees to take a look at their current W4 and use the Withholding Calculator to determine if any changes should be made to the form. A checkup would be wise if you have employees that:

  • Are a two-income family.
  • Have two or more jobs at the same time or only work part of the year.
  • Claim credits like the child tax credit.
  • Have dependents age 17 or older. 
  • Itemized deductions in 2017.
  • Have high income or a complex tax return.
  • Have a large tax refund or tax bill for 2017.

Changes to tax law legislationSo, why is the IRS encouraging a paycheck checkup? And why should employers encourage it too? Simple. The IRS has been working on implementing the Tax Cuts and Jobs Act (TCJA). This major tax legislation will affect individuals, businesses, tax exempt and government entities and includes increases in the standard deduction, removing personal exemptions, increases the Child Tax Credit, limits or discontinuation of certain deductions and changing tax rates and brackets.

Employers, as well as employees, can check the website for legislative updates and avoid any major headaches come tax time.

Related, in June the IRS have also released a draft of the 2019 W4 form with instructions. According to the American Payroll Association, "Both the way withholding amounts will be calculated and the form that employees will complete will be drastically different beginning in 2019. Employees will be strongly encouraged, but not required, to file a new Form W-4 for 2019."

Changes to the form are listed on the website and its recommended that employers review the changes in order to better inform their employees. Human Capital Management Systems, like ONEMINT, not only allows for automated company wide employee announcements, but provides tools and services related to payroll tax payments, processing W2s, 1095s and quarter amendments if necessary. For more information on the tax-related services offered by ONEMINT, schedule a demo today.

hcm demo request

 

Subscribe by Email

No Comments Yet

Let us know what you think