New IRS W-4 Form Could be Confusing…
You may feel overwhelmed by this new form and the calculations involved with setting up sufficient 2020 tax withholding. We certainly understand as it seems that to do it correctly you need to be a tax professional or have a really good grasp on how your income is earned as well as what deductions and tax credits you are entitled to.
Watch this video to see our reaction to the new form
For more clarification:
Here’s a link to the IRS FAQ
Here’s a great article for business owners and employees to read for more clarification
For more background information check out this article.
You do have options:
- Do nothing
If there has been no change in your circumstances and you are still working for the same employer and your 2019 w-4 and state withholding yielded correct withholding, you may be fine.
- Stick with your 2019 elections
If there has been no change in your circumstances and your are still working for the same employer, ask your employer to continue using your 2019 elections with the 2019 calculator option in their payroll system.
- Update your W-4 and state withholding forms using the IRS Withholding Calculator
If you are working for a new employer or your situation has changed, you will need to gather your current or prior year’s tax documents and recent pay stubs and then follow the detailed instructions. IRS Withholding Estimator
- Update your W-4 and state withholding forms using the IRS guidelines and worksheets on pages 2 – 4 on the form
Grab your calculator and payroll documents, read the instructions, then work through the IRS worksheets.
- Contact your tax professional and ask for help.
If you want to make sure that your withholding is in line, or you want to continue over-withholding so you get a refund, ask for help.
If you need help with your withholding calculations or have other financial or tax concerns contact us for an appointment.
Our team continues learning new skills and reviews opportunities for tax saving strategies under the new law, the TCJA to bring added value to our client meetings, and we’ve been doing this for over 25 years.