IRS WILL FAIL TO COLLECT TRILLIONS OF DOLLARS OVER THE NEXT DECADE, RESEARCHERS ESTIMATE
IRS HIKES 401(K) CONTRIBUTION LIMIT FOR 2020
The ultimate goal of proper withholding is to pay so much each month that you neither owe nor are owed, come April.
Among the big changes to the form are new boxes for workers to check indicating they hold multiple jobs or are part of a two-earner household – simplifying the process on previous forms.
“This is more to alert people to take other sources of income into account,” Ed Slott, CPA and founder of IRAhelp.com, told FOX Business. “It helps to highlight situations that caused problems last year.”

Slott noted that if people hold two jobs that each pay $20,000, for example, some may be getting taxed at each job at a very low rate because their income appears so low. However, come tax time, they will owe the IRS on the full $40,000 because they may have been short throughout the year.
The same goes for sideline income.
The forms will also shift some calculations onto employers – including converting full-year expected tax credits to reduce per-payroll tax withholding, for example, as noted by ADP’s Isberg.
One area of potential confusion, pointed out by ADP, is an area that asks for “deductions other than the standard deduction” – this will require workers to enter expected deductions over the standard deduction amount, not total deductions. Further, the group notes that in two-earner households, for individuals that opt to check the applicable box in Step 2, both spouses should check the box, but only one needs to fill out Steps 3 and 4 on the form.
It should be noted that employees with current W-4 forms on file with their employers will not need to update their form unless they switch jobs, have a change in personal status or choose to.
An early draft of the withholding form released for public comment was criticized for being too complicated and for asking taxpayers to reveal too much personal information. Multiple other drafts were released and subject to public comment since.
In the meantime, it is important to check and update your withholding amounts if your end-of-year tax refund, or liability, was not what you expected. Your current W-4 will be used until the new one is put on file – meaning any surprises could be exacerbated next April.
Many people did not check their withholding amounts leading into this tax season, despite the government’s advice to do so. People received little, or no refunds, despite having a similar financial situation to the year prior. Some even owed the tax agency for the first time.
The IRS has a withholding calculator that can help.
This Article originally from:foxbusiness.com: https://www.foxbusiness.com/money/irs-w4-2020-changes?from=timeline&isappinstalled=0