WASHINGTON (AP) – Congressional auditors say about 30 million people – 21 percent of U.S. taxpayers – will have to come up with more money to pay their 2018 taxes next year because their employers withheld too little from their paychecks under government tables keyed to the new tax law.
New tax withholding tables for employers were put together by the government early this year. About 30 million workers received pay that was “under-withheld” – making their paychecks bigger this year but bringing a larger bill at tax time next spring, according to the Government Accountability Office’s report.
About 27 million taxpayers would have been affected even if the new law hadn’t been enacted. The changes, however, added an estimated 3 million to that number.
Millions of American workers started getting fatter paychecks early this year, as employers withheld less money in anticipation of lower income taxes under the law. According to the nonpartisan Tax Policy Center, a middle-income household should on average get a $930 tax cut this year, lifting its after-tax income by 1.6 percent.
But many taxpayers will end up paying more, because of complications in the new tax law that may not have been taken into account by employers in estimating workers’ tax obligations.