The heavily debated tax reform law passed by the Trump administration in December 2017 is starting to bring bigger paychecks to many Americans.
According to new guidelines from the Internal Revenue Service, employers had until Feb. 15 to change how much they are withholding from paychecks for federal payroll taxes.
"On their payroll checks, they're getting more money because payroll taxes were reduced by President Trump when he reduced the payroll tax," said Sal Colmenero, a tax preparer in McAllen.
U.S. Secretary of the Treasury, Steven Mnuchin, said recently that the new rules will mean that about 90 percent of Americans will have more take-home pay.
Some local business owners said they were unaware of the new tax laws effecting payroll. Many of the employees haven’t noticed any changes to their paycheck yet, and employers say they don’t know much about it because many outsource their accounting to a third-party.
Colmenero says that people should be seeing higher amounts on their paycheck, anything from a few dollars to a few hundred dollars.
The new tax laws, however, do not effect current income tax reporting. Those new laws will affect the 2019 income tax season. For next year, Colmenero says he expects taxpayers to get bigger tax return checks.
Experts recommend taxpayers to use the new IRS calculator onirs.gov, which will be available later this month, to ensure they are having the correct amount withheld from an employee’s pay.
However, taxpayers who typically itemize medical expenses or mortgages, for example, will find tax reporting different next year and should get help from a tax professional.
"For the middle class down here in the Valley, it’s going to be great," Colmenero said. "I think I’ve seen everybody get more money."