MAUMEE, OH (WTOL) - President Trump's new Tax Cuts and Jobs Act has already gone into place this year, with the promise that Americans would see more money in their take-home pay. Have you noticed a little extra pocket change coming your way?
Right now, many of us are focused on getting our taxes squared away and whether or not we're going to end up owing the government money. In the meantime, an estimated 90 percent of wage earners should experience an increase in their take home pay due in part to the federal government taking less out for Americans of all income levels.
Experts think most folks are spending these extra wages, which is good for the economy, but some would rather put it into savings.
Charles Schieb is a Mortgage Banker based in the Toledo area. He is planning on saving his paycheck add-ons and recommends others do as well.
"The economy is volatile. Very volatile, so make sure you invest and put it into stuff that are less risky. so, IRAs, 401Ks, keep it safe," said Schieb.
For most taxpayers, there are two key places on a typical pay stub where you will see the effect:
- Net Pay is the total amount of money you keep from every paycheck after federal income taxes and other deductions. This number will be larger due to the lower tax rates and larger standard deduction.
- Federal Tax Withholding is the amount of your pay the federal government takes from every paycheck for income taxes. This number will go down in comparison to your old pay stubs.
"Northwest Ohio is heavily manufacturing, wholesale distributors, as we know, and the tax breaks that they gave for us, especially it's called a 199-A for small businesses, past year deductions is huge for our economy in this area," said Bob Bradshaw, CPA and Senior Tax Manager at William Vaughan Company in Maumee.
According to The House of Representative Ways and Means Committee, 2018, has already resulted in more than 200 companies announcing new investments in America, creating new jobs, and increasing pay and benefits for their workers. The stock market is also expected to get another major bump as companies will likely use this extra money to buy back stocks.
The Congressional Budget Office estimates employers are likely to withhold $10 billion to $15 billion less from workers every month as a result of those tables.
More information from the House of Representatives Ways and Means Committee can be found here.