Experts Advise Caution As Tax Cuts Bring Meatier Pay Checks To Many Americans
NEW YORK (CBSNewYork) -- A new Reuters/IPSOS poll shows two percent of U.S. adults say they received a raise, bonus, or other perk because of recently enacted tax reform legislation.
Thanks to recent tax cuts and the jobs act passed in December, your paycheck is about to get a little meatier.
The Treasury Department released the new tables showed how much employers will withhold from their employees paychecks.
The good news, once the new guidelines are in place, about 90 percent of working Americans will see a drop in withholding, meaning more take home pay to spend.
"That's probably good for the economy," Certified Public Accountant, John Lieberman said.
He cautioned, don't get too excited about that extra cash just yet.
"For many people that are working, they have unreimbursed expenses, safety deposit expenses that in the past have been deductible which lowered their effective taxable income which will no longer be there, and they may be in for an unruly surprise on April 15, 2019 where they have a lower withholding, however they have to pay a higher tax," he said.
Lieberman suggested preparing now, by contacting your human resources department to see how many exemptions you're taking on your W-4 form, check this year's tax return to figure out which things are no longer deductible, then check IRS withholding table to see what your taxable income is.
"If your paycheck is so big all of a sudden. It's an expression, if it's too good to be true, you better check things out. You don't want any surprises on April 15, 2019," Lieberman said.
He said the best advice is to save or invest your newfound money and earn interest or investment returns.
