Insights: Article

Individuals Should Consider a Review of Withholdings for Income Taxes

By Craig Nyhus

August 20, 2018

The Tax Cuts and Jobs Act made changes to the tax law that will affect the calculation of income tax for all individual tax filers in 2018. Changes were made to tax rates as well as deductions that can be claimed when computing taxable income.

Tax Withholdings Could Cause Issues
For 2018, individual taxpayers generally will be subject to penalties if they do not submit withholding and/or quarterly estimated payments equal to the smaller of 90 percent of the tax shown on their 2018 tax return or 100 percent of the tax shown on their 2017 tax return (110 percent if the taxpayer’s 2017 adjusted gross income was more than $150,000).

In response to the tax law changes, the IRS has updated its tables used to determine the amount of withholding tax withheld from an employee’s paycheck. When both the tax law changes and the changes to withholding tables are considered, many individual taxpayers will find themselves in a different tax situation than they have been in prior years. To assist taxpayers this year, the IRS encourages all individuals to use its withholding calculator . Keep in mind, however, the federal tax reform changes may also affect state income tax calculations.

Get Help
Completing a review of withholding and estimated tax payments with your Eide Bailly tax professional can help ensure you remit an appropriate amount of withholding and estimated tax payments to the IRS and, if applicable, to state income tax authorities.

Contact your Eide Bailly professional to learn more about the benefits of completing a review of your income tax withholding and estimated tax payments.

Latest Insights

September 18, 2018
Article
As the largest tax reform legislation in the past 30 years becomes reality, it is important to stay up-to-date on planning opportunities and how reform may impact you and your business. Our Tax Reform: Practical Insights examples aim to break down…
September 18, 2018
Tool
Get ahead of tax season with the Eide Bailly Tax Planning Guide. A supplemental strategy guide to help guide year-end and make the tax laws work for you.
September 15, 2018
Article
The IRS Section 7520 rate will remain at 3.4% for October.
September 7, 2018
Recorded Webinar
The Tax Cuts and Jobs Act, the most comprehensive tax legislation in the past 30 years, has brought about many changes and opportunities for business owners to consider. One big change is the Section 199A – 20% deduction for Qualified Business…
August 28, 2018
Article
Recently, more companies in the manufacturing industry are becoming involved in foreign transactions, including exporting. However, many are not aware that they can improve their cash flow and reduce their U.S. tax liability through the use of the…
August 28, 2018
Article
If you’re a company with foreign sales, one suggestion for tax relief is setting up an IC-DISC. What is an IC-DISC? The Interest-Charge Domestic International Sales Corporation, more commonly known as the IC-DISC, is an export incentive…
August 20, 2018
Video
Are you building or remodeling a building that is 50,000 or more square feet? By including energy efficient components into your plans, you could benefit from the Section 179D energy efficiency deduction.
August 15, 2018
Article
In this Insight, we will outline the key provisions of the proposed Section 199A regulations and highlight considerations and concerns.
August 6, 2018
Podcast
Eide Bailly’s Tax News and Views podcast explores current tax topics of interest and provides tax insight to help listeners make informed decisions.
Find A Location