Withholding in 2019 will not look like withholding in 2018 (Gasp!)

If you’ve already tackled your 2017 income taxes, you’ve probably noticed that not much has changed, despite the Tax Cuts and Jobs Act. That’s because the 2018 1040 tax filing season is basically unaffected by the TCJA—those provisions kicked in on Jan. 1.

Your 2018 income tax withholding process was likewise relatively unaffected, the late withholding tables, W-4 form and withholding calculator notwithstanding.

The smooth sailing appears to be over; income tax withholding in 2019 may be a much rockier experience. How rocky is anyone’s guess right now?

Looking ahead to payroll in 2019

How many forms and information processing systems does it take to complete a 1040 filing season? Well, according to Ken Corbin, Commissioner, IRS Wage and Investment Division, the answer is 400 forms and 140 information processing systems. Corbin spoke at the recent American Payroll Association Capital Summit. A lot of those forms and processes will need to change due to the TCJA, he added.

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Similarly, Corbin commented that the IRS is planning to significantly overhaul the income tax withholding process for 2019. While this will include a completely new W-4, which should be ready for prime time this summer, Corbin gave no other details. He did say, however, that employees will still not be required to refile their W-4s, although they will be encouraged to do so.

The 2018 editions of the three IRS pubs Payroll relies upon most—Pub. 15, Employer’s Tax Guide; Pub. 15-A; Employer’s Supplemental Tax Guide; and Pub. 15-B, Employer’s Tax Guide to Fringe Benefits—note the changes brought about by the TCJA, but weren’t all that much different from past years’ pubs.

The pubs, along with others (probably Pub. 463, Travel and Entertainment, Gift, and Car Expenses, Pub. 505; Tax Withholding and Estimated Tax; and Pub. 972, Child Tax Credit) will undergo substantial editing for 2019.

According to Corbin, these pubs will also be released much earlier in the fall.