On March 1, the IRS released an updated tax withholding calculator designed to help employees estimate their 2018 tax liability and–if needed–make changes to the withholding elections on their W-4.
This is a big ol’ deal–both to your HR team and your employees–and here’s why:
The new tax law means bigger paychecks for most employees (yay!). It also created changes to the tax code that make existing W-4s less accurate (opposite of yay!). In other words, if your employees don’t adjust their withholding amounts, they could be shocked to get a smaller 2019 refund, a balance due, or even a penalty. And if this happens, guess who they might blame? That’s right…you.
So! To prevent this from happening, take these steps in the next few weeks:
- Get the word out ASAP: Now that taxes are front of mind, send an email to all your employees encouraging them to use the brand new IRS withholding calculator, and explaining what can go wrong if they don’t. The sooner they adjust their W-4, the less chance they’ll be unhappily surprised this time next year. Send a reminder email, too, to show you mean it.
- Make it easy for employees to update their W-4s: If they can make changes online via your payroll or HR systems, provide the link and clear instructions. If they need to fill out a new paper form, tell them where to find it and how to submit it.
- Prepare your team to answer questions: Before you tell your workforce to check out the IRS calculator, run through it yourself to make sure you understand it and are ready for their questions.
ALEX can help your employees with other tax-related conundrums too. ALEX Benefits Counselor shows employees how much they could save in taxes by contributing to their 401(k)s and HSAs. Contact us for a demo!