The new tax law made some sweeping changes in terms of personal and dependent exemptions and enhancements to the child tax credit. As you're gearing up for tax season though, keep in mind that the changes as a result of tax reform largely go into effect next year, when you're filing your 2018 tax return in 2019.
"This year, filing is business as usual," says tax attorney and certified financial planner Rebecca Walser. "It's next year that will be really different."
What you will see this year are changes to your paycheck — many Americans will see a boost — since the IRS has updated the income tax withholding tables. This also means that every employee should review their W-4, the form that determines how much income tax is withheld from your pay, to make sure you're withholding the right amount under the new legislation.
You fill out a W-4 when you start a new job, but you can change it as necessary. The form asks for the number of allowances you want to claim, since you get an allowance for having a spouse, for example, or having kids or filing as a head of household, and those allowances affect how much of your paycheck will be set aside for taxes.
It's important to get the right amount withheld: If you don't withhold enough, you may owe the IRS come tax time, and if you pay too much, you could end up with a large refund, which means you've essentially given an interest-free loan to the government.