More than 50 percent of approximately 200 respondents to a New Jersey Society of Certified Public Accountants’ (NJCPA) membership survey earlier this month said that less than half of their clients have reviewed and/or updated their withholdings due to the tax changes from the 2017 Tax Cuts and Jobs Act (TCJA). Almost an equal amount (13-14 percent) said that “about half” of their clients either have reviewed or updated their withholdings or were “not sure” whether their clients reviewed or altered their withholdings.
Thirty-five percent of the respondents said “less than half” of their individual and family clients will owe money next tax season due to underwithholding, while 27 percent said “about half” will owe money and 17 percent said “most” will owe money.
Since the TCJA lowered personal income tax rates, eliminated personal exemptions and increased standard deductions for 2018 while cutting some other tax-free benefits, the Internal Revenue Service (IRS) subsequently issued updated income tax withholding tables last January.
Individuals looking to determine if a new W-4 form is needed for their employers can access the IRS withholding calculator on the IRS website. Individuals should review it quickly since the number of paychecks remaining in 2018 is dwindling. According to the IRS, those who may be particularly in need of updating their W-4, include two-income families, those with children claiming the Child Tax Credit and those who itemized deductions in 2017.
“It’s precisely amid this tax reform that our members provide the most practical advice to their clients. CPAs provide insight on a variety of topics, but tax issues are particularly challenging for New Jersey residents and businesses,” said Ralph Albert Thomas, CPA (DC), CGMA, CEO and executive director, NJCPA. To assist the public in trying to locate a CPA, NJCPA’s Find-A-CPA directory provides a comprehensive listing of practices and areas of specialty.
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