Updates to 2024 Federal Taxes
IRS has updated tax brackets for 2024. See how this affects your first paycheck this year!
AskCPASam examines what options are available to payroll departments in moving forward with payroll amidst congressional indecision.
Working in the payroll software industry during the day has certainly opened my eyes to problems created by our federal elected officials. Under normal circumstances, Congress decides on a budget for the next year with significant lead time for the president to sign the legislation and the Treasury department (IRS) to issue tax tables based upon that law. Tax tables, if issued in early November, can be coded, tested and released by software companies well in advance of the next tax year. Once software companies release these tables, payroll and accounting software providers must update their customers with the new calculations after performing tests of their own. This entire process can take up to a month. Now, mix in this year's congressional indecision. The federal government's budget has still not been finalized as of the writing of this post. Many analysts and representatives are saying nothing will happen until the 'lame duck' session following the election in November. With no tax law available for writing next year's tax tables, there can be no software coding and testing at the tax table software level or the payroll software provider level. To add even more complexity to the situation, how is anyone supposed to plan for their tax liability with no rules in place to determine how much liability will exist?The Treasury Department has three choices:
If Treasury and Congress do not follow the same path, any mix of two of these scenarios would cause tax confusion like we have never experienced before. Think about the Treasury Department assuming tax cuts will continue while Congress lets them all expire. Not only would there be two releases of withholding rules (expensive!) within a short amount of time, everyone would experience underwithholding. This would require that everyone re-evaluate their tax position to ensure withholding or estimated payments would be enough to cover liability.
While I normally don't get political in this blog, this time I'll make an exception. Please write or contact your Congressman and make a good case for the urgency of a new budget. Delaying will cause withholding problems with all taxpayers and prohibit those who wish to plan from making those plans. Should we withhold on an unpatched AMT, reduced child tax credits, Making Work Pay credit? Please Congress, let's get this resolved.
IRS has updated tax brackets for 2024. See how this affects your first paycheck this year!
Check out the updated 2024 Federal benefit limits for 401(k), HSA, and simple IRA, and more. Stay informed and plan your finances with confidence!
New updates to the 2023 and 2024 401k contribution limits. Use a free paycheck calculator to gain insights to your 401k and financial future.