By: Jose Espada, director, Office of Student Financial Services
Students are beginning to receive employment packages from the residency programs where they matched. Make sure to complete the information immediately and send it back so the residency program has sufficient time to process the information through the Human Resources department to ensure you are in the system for payroll and other benefits. One of the most important forms you will receive is the W-4. This form was covered in the tax segment of the Future Impact Program, including how to complete the form to avoid tax issues, but still maximize net income. The IRS withholding calendar is a good online resource for understanding and thoroughly completing the form.
The IRS has modified its withholding calculator and revised its Form W-4 in response to the Tax Cuts and Jobs Act that became law on Dec. 22, 2017. The Tax Cuts and Jobs Act has ushered in significant changes to the federal tax system regarding tax brackets and rates, causing the IRS to update the calculator and Form W-4 in response.
“Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter. “Taking a few minutes can help taxpayers ensure they don’t have too little – or too much – withheld from their paycheck.”
According to the IRS, the following groups should take special care to check their withholdings:
• Two-income families
• People with two or more jobs (other than multiple positions within IU) at the same time or who only work for part of the year
• People with children who claim credits such as the Child Tax Credit
• People who itemized deductions in 2017
• People with high incomes and more complex tax returns
Students are strongly encouraged to review the new form and use the IRS calculator to check withholding.