The IRS changed the W4 for 2020, the intent behind the changes were to make it simpler to fill it out. Here’s what you need to know about the new IRS W-4.
The Form W-4 is the Employee Withholdings Certificate. This is the form that employees fill out for employers to deduct income tax from their earnings. It has needed an overhaul for quite some time. According to the IRS, this new form is less complicated and only requires taxpayers to answer more straightforward questions.
There will no longer be deductions, or personal exemptions. Instead the new Form W-4 calculates withholdings by having you fill out your information such as your name, job information including multiple jobs and if your spouse works, dependents, and other adjustments, then it must be signed. Not everyone has to fill out every step, it varies by individual. To see what the new 2020 form W-4 looks like, click here.
Who has to fill out the new form?
If you’re already working you don’t need to fill out the new form for the new year. But if you’re newly employed, or have had a change in your lifestyle status, then you would need to fill one out. A change in lifestyle status could include a marriage, divorce, having a baby or adoption.
Be careful when filling it out, if you don’t have enough taxes withheld, you could end up owing the government money when you file your taxes. If you have too much withheld, think of it as an interest-free loan (and a smaller paycheck). The IRS is there to help you figure it all out. They have a tax withholding estimator which can walk you through it all. Just have all of your previous year’s information available so that it is as accurate as it can be.
If you’re having trouble keeping up with the tax laws, or just don’t have time for it anymore, contact Howard Employee Services. We are your trusted all-in-one employee & employer services provider.