The IRS has unveiled the new, redesigned Form W-4 for the tax year 2020. This new form eliminates many of the complex tables used in previous versions and includes many enhancements from the earlier draft version.The Treasury and IRS heeded calls from several accounting and tax professional groups who expressed concerns that the draft form exposed too much information to a taxpayer’s employer about their outside sources of income.
The forms redesign was necessitated by sweeping changes made to the tax code by the Tax Cuts and Jobs Act, which eliminated the traditional exemption for dependents and changed many of the deductions typically taken.
This year’s tax season saw many taxpayers owing taxes when they filed due to under-withholding. In order to avoid this, the IRS recommends that you use their newly updated paycheck checkup tool. If you are over or under-withheld the IRS recommends you make changes to your income tax withholding by filing another W-2 with your employer.
If you have any questions about your withholding or quarterly tax estimates, contact your Zinner & Co. tax expert.