Along with the new tax law, the IRS is set to release a new W-4 for the 2019 tax year. This new W-4 is meant to incorporate the new tax changes to make the withholdings on your paycheck more accurate. The ultimate goal is for taxpayers to not owe or be owed anything once April 15th hits.

This new form has eliminated the need for claiming certain allowances. Instead, the draft form asked workers to input the annual dollar amounts for:

  • Nonwage income, such as interest and dividends
  • Itemized and other deductions
  • Income tax credits expected for the tax year
  • For employees with multiple jobs, total annual taxable wages for all lower paying jobs in the household

There have been some concerns with this new form, mainly because it asks for spouse and family income, as well as additional job information which employees might not want to disclose.

If taxpayers are not willing to disclose this much information to their employers, they can instead use the IRS withholding calculator. The only downside to this is that the calculator is not as easy to use, and the instructions can be confusing.

The new draft of the W-4 has been released for tax professionals and public review/comment. In order to complete this form, that may mean lugging in past 1099 forms, paystubs or last year’s tax returns to fill it out correctly. Some information you will need is:

  • Your filing status
  • Number of dependents
  • Information about your itemized deductions such as home mortgage interest, state and local taxes, and charitable deductions
  • Earnings from all jobs
  • Information about nonwage income such as business income, dividends, and interest

 

The above information is of a general nature only and should not be relied upon for specific situations. Click here for additional tax services information.

Call Marlies Y Hendricks CPA PLLC at either 716-694-3500 or 910-769-8730 as required to set up an appointment.