If you're a taxpaying citizen of the United States, the Republican tax cut plan passed by Congress last year might place a brand new demand on you. Namely, as The Washington Post detailed on Thursday, you might need to double-check your paycheck with a new IRS tax calculator — that hasn't even been released yet — to make sure you aren't either paying too much or too little in taxes.
The upshot is that thanks to the new tax rates passed by the GOP late last year, people with somewhat complicated tax returns ― in particular those who file itemized tax returns, according to the Post ― will need to make use of the not-yet-available online calculator to make sure they aren't overpaying or underpaying taxes out of their paychecks.
According to the report, the calculator is slated to be released to the public sometime in February. It's worth noting that this won't affect the tax returns that are coming due in April, nor will the GOP's tax rate changes be in effect; this year's tax filings cover earnings for 2017, prior to when the Republican bill was passed.
It'll potentially be very important for your 2018 filings next year, however, which is why you'll want to use the calculator to make sure you aren't going to be hit with an unexpectedly large tax bill next year. If your employer is withholding less money from your paychecks than it should be under the new tax regime, that means you'll be forced to pony up extra money when next year rolls around.
Needless to say, that's an outcome that the Trump administration has good reason to be worried about. After insisting for months that the plan would constitute a tax cut for American families ― despite multiple analyses that showed its main impact would be a long-term transfer of wealth into the upper and corporate classes ― a tax bill coming back larger than expected could be a major blow.
On the other hand, the revelation that too much money was taken out of your paycheck could lead to you getting a tax refund when next year rolls around. As Politico notes, Democrats are concerned that the administration is attempting to artificially boost people's take-home pay in advance of the 2018 midterms by having less money withheld from their paychecks. Treasury Secretary Steve Mnuchin has described these accusations as "nonsense."
According to the Post's report, the onus on getting the paycheck fixed will be on the employee, too. If the calculator shows that not enough or too much is being withheld in taxes, it's up to the worker to fix that with their employer.
The Republican tax plan passed both the House and Senate in December 2017, despite fervent outcry from progressives, activists, and advocates for income equality, as well as the bill's stark unpopularity. Just 24 percent of Americans polled prior to its passage supported the bill, compared to 41 percent who thought it was a bad idea.
That didn't slow the GOP's enthusiasm for the legislation, however. Just like with its efforts to repeal the Affordable Care Act throughout the summer of 2017, which was actually even less popular than the later tax bill, overwhelming public disapproval didn't seem to dim Republican lawmakers' collective zeal to get something passed.
Even further, one of the main pitches on the part of Speaker of the House Paul Ryan was that the bill would simplify the process of handling your taxes; he repeatedly claimed, in fact, that you could file them on a piece of paper the size of a postcard. Experts have denied that Ryan's postcard claims are true, however, and now it seems there's already an additional complication from the bill that many taxpayers will have to grapple with.