According to the U.S. Department of Treasury, the majority of Americans should expect to see an increase in their take-home pay this year, too.
The major changes affecting individuals include new tax brackets, (mostly) lower income tax rates, a near-doubling of the standard deduction and the elimination of both personal exemptions as well as many itemized deductions.
"We have already seen confusion about withholding changes, confusion about the deductibility of prepaid property taxes, and confusion about whether states can allow taxpayers to make charitable contributions in lieu of taxes as a way of permitting their residents to claim larger tax deductions than would otherwise be allowed because of the new $10,000 cap on the state and local tax deduction", National Taxpayer Advocate Nina Olson said. In the meantime, employers and payroll service providers should continue to use the existing 2017 withholding tables and systems.
Additional funds are also required for programming and system updates, training employees, creating new tax forms, as well as for changing regulations and guidance, she said.
Millions of Americans will now have to use an Internal Revenue Service tool to make sure that their new paychecks are accurate, administration officials announced Thursday, and people are not happy about it.
The new law provides steep tax cuts for corporations and wealthy Americans while offering more modest reductions for most low- and middle-income families and individuals.
The plan is to have new W-4s by 2019.More news: Mamata Banerjee remembers Har Gobind Khorana on birth anniversary
There are new tax credits while other mainstays - like the $4,050 personal exemption - are gone. And that results in a refund when they file their tax returns. A senior IRS official said he expected that level to fall just a bit next year to around 73 percent.
The government is requiring employers to begin using the new guidelines as soon as possible, but "no later than February 15".
But Democrats have alleged the number could fall much more, accusing the White House of changing the tax tables in a way that will have Americans dramatically underwithhold their tax payments during the year only to be hit with big tax bills next year.
And roughly three-quarters of tax filers are overwithheld because they take too few allowances.
The new guidance will allow many taxpayers to start seeing bigger paychecks due to the new law.
The GAO has said Wyden's request must go through its usual review process before a decision to proceed is made. The White House said Thursday businesses should make these adjustments by February 15, part of the administration's push for millions of workers to see bigger paychecks as quickly as possible.