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Q: Is the IRS working on a new Form W-4 to reflect the new tax law?

A: Yes. The IRS continues to work on more detailed withholding information, which will be available soon in Publication 15 and related publications. In addition, the IRS is working on revising the Form W-4 to more fully reflect the new law and providing taxpayers information to determine whether they need to adjust their withholding. The IRS is also revising the withholding tax calculator on IRS.gov to help employees who wish to update their withholding in response to the new law or other changes in their personal circumstances in 2018. The IRS anticipates this calculator should be available by the end of February.

https://www.irs.gov/newsroom/irs-withholding-tables-frequently-asked-questions

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I h ave one client who gets irregularly spaced bonuses that are processed differently from regular payroll (as if for a separate employee).  Those bonuses ALWAYS have insufficient tax withheld.  The standard W4 calculations are useless - we have had to base on expected wages, expected bonus with under-withholding, and add the under-withheld amount to the regular wage amount.  It's always a nightmare, but it can only be done by saying "$131 per pay period more tax" rather than mucking about with exemptions.

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Unless someone is aware of the ramifications, those types of payments are always under withheld.  Few want to use the supplemental rate (since the employee would be upset), and few want to do the math for aggregate.  Most employers will even fudge those checks, removing other deductions, to make the bonus look bigger - knowing no employee will ever complain about getting too much money.  Had two of the exact same question in the last half hour!

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