Earlier this year, the Internal Revenue Service released updated income tax withholding tables for 2018. The new withholding tables reflect the numerous changes to be implemented according to the Tax Cuts and Jobs Act. For instance, the new withholding rate for supplemental wages in 2018 will be 22%, down from 25% previously.
With these changes in mind, we strongly encourage your employees to check their withholding and use the IRS Withholding Calculator to ensure the proper amount is still being withheld from their paycheck. Those with more complex tax situations should also consult IRS Publication 505, Tax Withholding and Estimated Tax for additional information.
Many relocation related payments are now taxable. We recommend monthly or quarterly compensation reviews for cross-border employees to ensure proper compliance and payroll reporting.
Our team is available to assist you with all the challenges presented by the new tax reform.
Click here for more information regarding this subject.