January 2018 Tax Snacks
Tax Snacks: Bite-size tax news and information on the fly
Dates to Remember
- Q4 2017 estimated tax payments are due for individuals and trusts
- Most forms in the 1099 series must be provided to the 2017 payment recipients
- Form 1099-MISC (reporting nonemployee compensation) must be filed with the IRS
- Forms W-2 are due to employees, IRS, and SSA
- 2017 tax returns and Q3-Q4 estimated tax payments are due for victims of Hurricanes Harvey and Irma who received special extensions
- Most forms in the 1099 series must be filed with the IRS (except for 1099-MISC, which is due January 31, and many forms that will be submitted electronically, which can be filed as late as April 2)
Wage withholdings under the new law
Personal exemptions have gone the way of the dinosaur under the Tax Cuts and Jobs Act as of 1/1/18, leading to a bit of confusion regarding employee payroll withholding. Whether or not you remember doing so, any employees reading this filled out a Form W-4 that is used by employers to determine how much income tax is withheld from your wages. That withholding is determined in part by how many exemptions you entered on that form. Your entries on W-4 renew automatically each year until and unless you fill out a new one that supersedes it. Now that exemptions no longer exist, many people speculate that Form W-4 must be updated or overhauled to generate an appropriate level of withholding.
The IRS is working on guidance regarding this matter, and we are told that the tax reductions included in the Act will surface as early as February 2018, potentially using the existing W-4 settings. There is more to follow on this, and we will update readers as it becomes available. In the meantime, wait and see appears to be the best approach.
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.