Even if you don’t know what a W-4 form is off the top of your head, you have seen this form before. Every time that you have started a new job, you should have filled out a W-4 form. In doing so, you identified the amount that your employer should withhold from your paychecks each pay period. This money will ultimately go towards federal income tax.
The 2020 W-4 Form
The IRS has released a new version of the W-4 form for the tax year 2020. It is now called the Employee’s Withholding Certificate. This may sound intimidating, but tax professionals insist that it is actually a simpler form. However, filing this form out will now most likely take people a little longer and they will need more specific information handy to complete it.
Who Does The New W-4 Affect?
If you are starting a new job then this new form will affect you the most directly. If you have recently had a major life event such as having a child, buying a house, or getting married, then you will need to update your W-4. If you are unhappy with your 2019 tax outcome, the IRS also suggests that you fill out a new W-4 form.
There are a few key differences in the 2020 W-4 Form…let’s take a closer look…
What’s Different About The New Form
The new form is now 5 steps.
There is no longer a personal allowance worksheet.
There is a “Multiple Jobs” worksheet as well as a “Deductions” worksheet.
You will need the last year’s income information for the best filing results.
What Do You Need To Fill Out The 2020 W-4?
The IRS suggests that filers read and follow the instructions thoroughly before filling out the new form. It will be helpful to have last year’s deductions, tax credits for dependents, and last year’s tax information available while filling out the new W-4.
The best way to promote accuracy on the new W-4 form is for employers to allow their new hires to take this form home to fill out, rather than asking them to fill it out on the spot. This new form is much easier to complete electronically than on paper.
The first step is very straightforward. Here is the information that you will need to provide…
Your legal name
Social Security Number
Indicate your marital status
Step two is where the form gets a little more complex…hang in there…we’ll get through it!
The good news is that you may not even have to fill out steps 2-4. If you are single, have no dependents, and no second job, then you can jump ahead to step 5!
If you have a spouse or a second job, here’s how to handle step 2…You can either check out the new attached “Multiple Jobs” worksheet, or you can save yourself some time and use the estimator on the IRS website.
Do you have kids…here’s where you claim a deduction for them! If you don’t have kids, you can skip this one, we’ll catch up with you at step four!
When you are filling out step three and step four, remember, using the salary from the highest paying job between you and your spouse will ensure the most accurate results.
We are almost done! Step four is optional! This step is where you can report any income that is not job-related. You can also include any information related to non-standard deductions or request any additional tax that you want to be withheld each pay period.
We have reached the finish line, see that was pretty easy! All you have to do is sign the form. As long as you haven’t purposely committed perjury along the way…give the IRS your autograph and you’re good to do!
Are you an employer that is excited about new hires, but dreads dealing with the paperwork? TaxBandits is here to cover all of your tax form needs, including the new 2020 W-4 Form!