The Tax Cuts and Jobs Act, passed in December 2017, made significant changes to the US tax law, which will impact your 2018 US federal tax return. The tax law changes include:
If you are on a company sponsored international assignment and are tax equalized, you may be subject to hypothetical tax withholding, in lieu of actual income tax withholding. Please contact your GTN representative if you have questions regarding your hypothetical tax withholdings or if you believe additional changes should be made to your hypothetical tax withholding.
The above changes may have a significant impact to your overall tax position and it is highly recommended that you review your withholdings to make sure you have sufficient taxes withheld to meet your tax obligation. A recent analysis conducted by the IRS found that many taxpayers could see a decrease in their tax refunds or an increase in their tax balance due when they file their 2018 taxes in early 2019. Checking and adjusting withholding now can prevent an unexpected tax bill and penalties next year at tax time. It can also help you avoid a large refund if you would prefer to have an increased cash flow each pay period.
The IRS has recently highlighted certain groups of taxpayers who are strongly encouraged to check their withholding due to the likely impact of the tax law changes on their specific circumstances. These groups include taxpayers who meet one or more of the following criteria:
To help you review your tax withholding, the IRS has updated their Withholding Calculator tool and Publication 505, Tax Withholding and Estimated Tax, to reflect changes made by the Tax Cuts and Jobs Act. Click the links below to read the official publications.
In addition to your US federal tax return, the Tax Cuts and Jobs Act may also have an impact on your 2018 state tax filing. Not all states have taken the same approach in aligning state tax laws with the recent federal changes. As a result, we recommend that you consult your state revenue authority website (state revenue agencies) to understand any state law changes that may require updates to your state income tax withholding. As always, please contact your GTN representative for assistance on your withholding or any other tax matters.
The information provided in this alert is for general guidance only and should not be utilized in lieu of obtaining professional tax and/or legal advice.DOWNLOAD ALERT