Members of the Pennsylvania Institute of Certified Public Accountants (PICPA) in a recent poll revealed that three quarters of their clients needed to adjust their tax withholding, and most of those clients (84 percent) needed to increase the amount being withheld so they do not incur a large tax bill when they file their 2018 returns. The IRS changed the withholding tables earlier this year after passage of the Tax Cuts and Jobs Act of 2017.
The poll, conducted by the PICPA from Sept. 17 through Oct. 1, asked CPA tax practitioners to comment on their experiences of working with clients and the new tax withholding tables. The poll was distributed to CPA members indicating tax as a specialty area, and respondents were primarily sole practitioner CPAs or CPAs working in small firms that typically serve small businesses and perform individual tax preparation and planning services. Of the clients whose withholding rates were adjusted, 41 percent were surprised that changes were needed.
“The new withholding tables will result in many taxpayers having decreased tax withheld and owing tax when filing their 2018 returns,” said Lea Ann Plessinger, CPA, a sole practitioner in Lock Haven, Pa.
Overall, more than 70 percent of the surveyed CPAs’ clients had their tax withholding reviewed. The IRS has been promoting its “Paycheck Checkup” program for the last several months, which includes a withholding calculator. But not all tax positions are easily calculated. “One size doesn’t fit all,” said Gail Hauseman, CPA, of Berkshire CPAs in Wyomissing, Pa. “Everyone should review their withholding so they know it works for their situation.”
For more details about the poll visit PICPA’s Tax Help page to get more tips on understanding the new tax laws.
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