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Tax reform changes bringing paycheck increases in February

With the new tax reform law changes in December, this year some employees will see paycheck changes and very soon.

Posted: Jan 17, 2018 7:51 PM
Updated: Jan 18, 2018 10:47 AM

FORT WAYNE, Ind. (WFFT)- Tax reform legislation changes in December changed the amount of income tax withheld from  paychecks offering some workers an increase in take home pay. Some people are already making plans.

"First off, I'll give 10% to charity, to church, and other things and invest a little bit," Anne Dennis said.

Howard Bailey Financial Inc. gave WFFT a breakdown of what you can expect will change in your paycheck.

"We have seen the revamping of the withholding tables and that means we're going to see less withholdings being taken out of about 90% of taxpayers paychecks in the coming year, and that means employees are largely going to see a net increase. It's a small increase, but a net increase in the amount of dollars that are hitting their bank account from their employer every month," Casey Weade said.

The IRS said people could see changes as early as February.

Employers have a deadline to switch over to the new withholding tables by February 15th.

It's important to mention there won't be a change to the W4, which is the form employees use to determine allowances taken out when getting withholdings done with the employer, but workers will need to review their withholding.

"It's something that needs to happen because everyone wants to have dollars in their pocket and they want to make sure their withholdings are relatively correct,"Weade said.

If you want to make the best use of your money, Weade recommends using more caution and putting some money away for a rainy day because there could be some consequences.

"Take the little extra that you're getting every single pay check, and put it in a savings account because we will not know what the net effect of this is until you go in and file your taxes in 2019. If you owe, you want to make sure you have that cash on hand," he added.

Especially, if you're not withholding enough from your paycheck.

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