New W-4 required for some, helpful for others
The Internal Revenue Service is releasing a new W-4 form. It is required if you are hired or make withholding changes in 2020, but, even if it is not mandatory, the form could prove beneficial.
The W-4 tells employers how much federal income tax should be withhold from a worker’s paycheck. Accurately completing this form can help ensure you have the right amount of federal income tax withheld from your paychecks throughout the year.
Following the 2018 changes in tax law, the new W-4 Employee’s Withholding Certificate includes withholding tables that work with both the new and prior year forms. This makes it a helpful tool for a “paycheck checkup” to see if withholding changes are needed.
To conduct the checkup, you can use the IRS’s Tax Withholding Estimator. It is wise to have handy a copy of your most recent pay stub and tax return.
- Allows you to account for credits and deductions
- Gives you an idea of whether you’ll owe or get a refund based on your current withholdings and the amount of tax you owe for the year
- Offers guidance on what to do if you want to get a refund or would rather get the amount you owe as close to zero as possible when you file your federal income tax return
If you do not submit a new form, withholding will continue based on your previously submitted form. If you are submitting a new W-4, the IRS has published Frequently Asked Questions that you may find helpful as you complete the form.