Legislation changes to consider this tax season

Photo by Tony Kukulich

The team of professionals at California Payroll specializes in payroll, taxes, time-keeping and human capital management.

Tax season is naturally a busy time of year for payroll professionals, and those in California may notice this year’s tax form has undergone some significant changes.

On the heels of the 2017 Tax Cuts and Jobs Act (TCJA), a new W-4 form — the form all employers issue to new employees — was released Dec. 5 last year, effective for use Jan. 1.

“The new draft Form W-4 reflects important feedback from the payroll community and others in the tax community,” said the IRS  in a statement. “The primary goals of the new design are to provide simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors.”

While the form was created with the intent to simplify the process, it hasn’t changed since the late ‘80s, leaving many business owners with questions on how to properly fill them out. That’s where the Brentwood-based team of California Payroll comes in.

“We don’t do personal tax returns, but people make their choice of how much federal income tax to be withheld, and it’s different this year,” acccording to California Payroll. “But it obviously creates questions because it’s different.”

Filling out this new form correctly is important, as significant changes stemming from the TJCA might result in taxpayers owing taxes, the General Accounting Office (GAO) has warned.

“Overwithholding fosters tax compliance: If an employee’s withholding is less than tax liability, the employee may owe additional taxes," wrote the GAO in a report to congressional requesters. “However, Treasury officials noted that while overwithholding fosters tax compliance, it also has costs for taxpayers, particularly for low-income workers who may be liquidity constrained and could benefit more from larger regular paychecks than from larger annual tax refunds.”

For  the team at California Payroll, the changes mean making sure clients are well equipped with knowledge and their expert guidance. The company handles human capital management, which includes providing payroll, timekeeping, attendance and human-resource software and services.

California Payroll is located at 1240 Central Blvd., Suite B, in Brentwood. For more information, visit www.californiapayroll.com.

For more information on the tax forms, visit: www.bit.ly/2017tcja; www.bit.ly/2020-w-4; and www.bit.ly/usgaowithholding.

0
0
0
0
0