Your Paycheck: Have You Thought About Your Federal Income Tax Withholding?

In late December, the federal Tax Cuts and Jobs Act was signed into law. This legislation changed the amount of federal income tax that is withheld from your paycheck. In general, the impact of this legislation was to reduce the amount of federal income tax withheld from your paycheck, thus increasing your net pay. 

As staff members file their 2017 income tax returns and plan for 2018, many people have asked about the appropriate federal income tax withholding based on the new tax law. It’s a good question that we all should be asking. The law increased the standard deduction, removed personal exemptions, increased the child tax credit, limited or discontinued certain deductions and changed the tax rates and brackets. 

The Internal Revenue Service (IRS) is now offering a variety of resources to help taxpayers determine if they are having the right amount of federal income tax withheld from their paychecks. The starting point to review these resources can be found on the IRS website. The resources include FAQs, YouTube videos and a Withholding Calculator. 

If you need to make a change in your tax withholding, it can be made through the Employee Online tab of your Dashboard. Once there, click on “Tax Information” in the left-hand navigation section, click on “Edit” in the lower right-hand corner of the screen, make your changes and click “Save” in the lower right-hand corner of the screen. Your change will automatically update the payroll system and will be processed on the next available payroll. 

You can also model the impact of a tax withholding change on your paycheck through Employee Online by clicking “What If” under “Pay Check” in the left-hand navigation section. Once there, click “Create Baseline” in the bottom center of the screen (it may take a few seconds to calculate). In the “What If” column, make your withholding changes and click Submit. You can see the estimated change in your net pay on the right-hand side of the screen. 

Everyone’s tax withholding needs are unique to their individual circumstances. Heartland AEA cannot provide tax advice to staff, but we are glad to help you navigate the Employee Online tools to help you achieve your desired withholding. If you have any questions, contact Steve Jordan, Senior Payroll Specialist, at ext. 14908.