Working Americans are already seeing greater take-home pay because of the Tax Cuts and Jobs Act. As employers implement the Internal Revenue Service’s (IRS) new withholding guidelines—which dictate how much employers withhold from pay for federal taxes—the result is larger paychecks.
Administration officials estimate 90 percent of U.S. workers will see heftier paychecks because of the new withholding guidelines, which employers have until February 15th to implement.
How much will you get? It depends on a few factors: Your income, how often you’re paid, and the number of withholding allowances you claimed on your Form W-4. Check with your accounting office to get a rough estimate.
Fortunately, many Americans are seeing as much as a few-hundred dollars in extra savings. Wayne Love, a managed care worker in Florida, received an extra $200 in a recent paycheck, which will help pay for increased health insurance costs. Todd Anderson and his fiancé, both Texas educators, each received $200 in higher after-tax pay that will cover the costs of a second baby on the way.
Even the smallest tax savings make a difference. Julia Ketchum, a secretary in Pennsylvania, has seen her pay go up $1.50 a week—$78 over a year. It may not seem like much, but she’s happy to report it will more than cover her annual Costco membership.
More likely than not, you’ll have more money in your pocket in 2018. According to the left-leaning Tax Policy Center, the average middle-class household will receive a $930 tax cut this year—a 1.6 percent increase in after-tax income.
Happy tax savings!