IRS Issues 2020 Form W-4
According to the Internal Revenue Service, the newly redesigned W-4 form for 2020 reduces the form’s complexity and increases the transparency and accuracy. New employees first paid after 2019 or employees paid prior to 2020 who want to adjust withholding from their pay after January 1, 2020 must use the new form. Employees who are not switching jobs and are content with their withholding do not have to complete a new form.
The new form is divided into five steps
The new form is divided into five steps but only steps 1 and 5 are required for all employees.
Step 1 is where you enter personal information.
Step 2 of the redesigned form W-4 focuses on other sources of income such as a second job or spouses who are also employed. It will also direct you to an online calculator or worksheet to help determine whether you need to enter extra withholding on line 4(c).
Step 3 focuses on dependents who can be claimed on a tax return.
Step 4 involves any other adjustments including additional income and deductions.
Step 5 is where you sign and date the form before giving back to you employer.
Human resources and payroll advisors are not allowed to advise employees on the worksheet. The deadline for filing 2019 tax returns is Wednesday, April 15. As many of the recently enacted laws took full effect in 2019, this year’s return may be a good indicator of whether to adjust your withholding.
If you have any questions or concerns, please call our office to speak with an accountant.