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Some workers caught off guard by higher LA income taxes

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NEW ORLEANS, LA (WVUE) -

Some local workers were taken aback by news that more Louisiana income taxes are now coming out of their paychecks.

The change went into effect February 16.

'Wow, that would be a problem. We're barely making money now and then they're taking more money out,” said Delroy Johnson.

“I don't really appreciate them raising the state income, but I understand if it has to, I mean as long as it's going to a good cause,” said Sean Fiery.

The reason Louisiana gets to collect higher income taxes is because Congress overhauled federal income tax rates which is supposed to mean most Americans will owe less to the IRS for 2018.

But when federal income taxes go down, Louisiana income taxes head up. The state’s tax laws are tied to federal income tax policy.

"The general rule would be that the taxpayers will pay more, as a consequence of the reduced federal tax liability, they will pay more Louisiana income tax,” said Gerard Schreiber, Jr., who has been a CPA for 40 years.

"It feels like they're taking money either way, so, I mean, not always a big fan of taxes,” said Fiery in response to the change.

Schreiber calculated how the changes might affect taxpayers earning certain amounts of money. His computations showed that the federal tax bill for a  married couple with two children, who file jointly and earned $100,000 in 2017 would be $9,821.

By comparison, with the federal tax changes applied it falls to $6,824 for 2018.

"Their tax liability is reduced $3,000, okay,” Schreiber.

And for a single taxpayer earning $50,000 a year the federal taxes due for 2017 were estimated to be $5,645  and drop to $4,370 for 2018.

"So their tax liability on $50,000 of income in the standard deduction is going down around $1300,” said Schreiber.

And about the changes in the state income tax due to the drop in federal income taxes, Schreiber’s computations estimate that a single taxpayer earning
$50,000 in 2018 will shell out more to the state.

“Now in this instance it would only be $50 more but there's going to be variables to where it could be a hundred, it could be $200,” he said.

And a married couple with two kids who earns $100,000 and files jointly an increase is also in the offing.

"In this scenario, would pay roughly  $200 more now in other scenarios that we've done it varies from a hundred to $200 more that the taxpayer would pay depending upon the other variables that would enter into the computation,” said Schreiber.

According to the Weekly Louisiana Income Tax Withholding Table released by the La. Dept. of Revenue, someone earning between $750.01 and $770.00 a week with no dependents would have $25.31 deducted a week.

But if the taxpayer has four dependents the weekly deduction would be $21.88.

"Yes, I do mind if I have to pay more in state taxes,” said Johnson.

If employers fail to deduct the higher state incomes taxes, taxpayers would face big tax bills when they file their 2018 tax returns.

Here is a link to the state’s Income Tax Withholding Tables by, week, months, and year.

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