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The New W-4 Form
February 10, 2020
And What It Means to You
Beginning January 1, 2020, the IRS has issued a new W-4 form. This is significant as the recent Tax Reform eliminated personal exemptions and doubled the standard deduction when filing your personal taxes.
It is recommended that a new W4 be filed with your employer to ensure the proper withholding is deducted under the new code. It is highly recommended the new form be filed with your employer if you:
- Work for more than one job
- If you spouse also works and you file jointly
- If you claim the child tax credit or other tax credit
- If you have high income and a more complex return
Completing the Form
I have received a lot of calls asking “what to do with this new form”, so I have included some instructions to assist people.
You must complete steps 1 and 5. Steps 2, 3, and 4 are optional but can be helpful in ensuring your tax withholding more closely matches your tax obligation.
When you fill out Step 1 only, your withholding will be computed based on your filing status’s standard deduction and tax rates, with no other adjustments
There are certain situations that increasing the withholding should be considered:
- You hold more than one job at a time or you and your spouse both have jobs (Step 2)
- You have income from sources other than jobs or self- employment
- There are certain situations that decreasing the withholding should be considered:
- You are eligible for income tax credits, child tax credit or credit for dependents (Step 3)
- You are eligible for deductions, such as itemized deductions, IRA contributions or student loan interest deductions
It is also a great idea to use the Tax Withholding Estimator
to help ensure maximum accuracy. The link is below. Note you will need your latest paystub (to enter the federal tax withheld from last check, and the YTD federal tax withheld).
For more information contact me at nkirkland@bythenumberz.com.
Are you a business owner missing out of qualifying deductions because you are not aware of what can be deducted? I have compiled a listing of business deductions, a few that go overlooked year after year to assist business owners in maximizing the taxes, and reducing tax liabilities. Many of the deductions apply to independent contractors, freelancers, limited liability companies, corporations, and partnerships. Click here for you free download of business deductions. For more information contact me nkirkland@bythenumberzcpa.com
There are tons of how to’s lists out there on the world wide web.. but really it takes more than a list to grasp the understanding of setting up a business and the start of the business ownership journey! It can be overwhelming looking at the lists and the questions that rattle our brains can cause a lot of discouragement. I work with entrepreneurs and business owners on a weekly basis in tackling this hurdle and getting their businesses going and operating successfully. The first step is “creating what you want the business to do” are you providing a product and/or service and what will set you apart from the other 20 businesses doing the same thing?
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nkirkland@bythenumberzcpa.com
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Fairburn, GA 30213
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Are you a business owner missing out of qualifying deductions because you are not aware of what can be deducted? I have compiled a listing of business deductions, a few that go overlooked year after year to assist business owners in maximizing the taxes, and reducing tax liabilities. Many of the deductions apply to independent contractors, freelancers, limited liability companies, corporations, and partnerships. Click here for you free download of business deductions. For more information contact me nkirkland@bythenumberzcpa.com
There are tons of how to’s lists out there on the world wide web.. but really it takes more than a list to grasp the understanding of setting up a business and the start of the business ownership journey! It can be overwhelming looking at the lists and the questions that rattle our brains can cause a lot of discouragement. I work with entrepreneurs and business owners on a weekly basis in tackling this hurdle and getting their businesses going and operating successfully. The first step is “creating what you want the business to do” are you providing a product and/or service and what will set you apart from the other 20 businesses doing the same thing?