When the Tax Cuts and Jobs Act was passed in late 2017, it affected millions of individual taxpayers and tax preparers. As part of its implementation, the IRS adjusted its withholding tables. However, the adjusted withholding tables did not account for factors such as the elimination of personal and dependency exemptions or reduced itemized deductions. The result: Many taxpayers have been unable to accurately calculate their tax liability for 2018 and may have inadvertently under-withheld their taxes.
“Thankfully, the IRS saw the challenges that taxpayers could have with the new withholding tables and provided them with underpayment penalty relief,” said MACPA President and CEO Tom Hood. “It stated that it would waive the underpayment penalty for individuals who paid, by Jan. 15, 2019, at least 85 percent of the tax due for the current year.
“The MACPA and the AICPA welcome this change but believe more should be done,” Hood added. “We are hearing from many members that they and their clients are very concerned about the ongoing uncertainty around implementation of the TCJA.”
The AICPA recently sent a letter to the Department of Treasury and the IRS urging them to provide more extensive relief to taxpayers. The letter cites five recommendations that would benefit taxpayers:
To stay on top of developments and the profession’s advocacy efforts, visit the AICPA’s Tax Reform Resource Center.
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