What Changes are in the New W-4 Form for 2020?
Amherst, NH Taxpayer Has Questions
The biggest change to the new W-4 Form, debuting in 2020, is that there are no longer withholding allowances. Previously, more allowances claimed would mean that less of your paycheck would be taken for taxes. Instead, questions such as filing status, family income, dependents and the tax deductions that you plan to claim will be asked to determine your withholdings.
An Amherst resident started a new job at the beginning of the year. She was surprised when her employer had her fill out a W-4 that was different from those that she had completed in the past.
You No Longer Specify Your Withholding Allowances
In the past, the number of allowances that you specified on your W-4 would affect the size of your check. More withholding allowances, a smaller cut would be taken out for taxes. For 2020 this has been eliminated, with a focus instead on a calculation based on a series of questions about your status, dependents and any additional income. This will take some of the guesswork out of trying to decide how many allowances to claim, hopefully leading to a more accurate tax withholding.
Additional Information Needed to Complete the New W-4
Since your taxes are now calculated through a series of questions, the new W-4 form does take more time to complete for some people. Information such as your spouse’s income, tax credits and the deductions that you expect to claim may seem like a challenge. You will probably need to refer to last year’s tax return, or give your accountant a quick call, for assistance on some of these answers.
Not all workers will need to complete a new W-4 form in 2020. While employers can ask their employees to submit a new form using this 2020 version, any employee that already has a W-4 on file can decline. New employees will, of course, have to complete this new W-4 form.
With the help of Merrimack Tax Associates, the Amherst resident was able to complete the new W-4 form. Based on the information provided, her tax withholding throughout the year should now be accurate.
Set up an appointment with Merrimack Tax Associates’ professionals to learn more about the new W-4 form. Call today (603) 429-2009.