New W4 for 2020

Published: 1/14/2020 5:48:25 PM

Welcome to my first Blog about tax and accounting issues.

New employees hired after January 1 2020 will have a W4 very different from previous years. A W4 is a form used by the employer to determine the correct withholding.

The form goes into depth regarding topics like do you have a second job? Do you have other unearned income like interest and dividends? Did you take more than a standard deduction? And some other questions.

May people may find this complex so I encourage you to reach out if needed to your tax practitioner.

What is the purpose of all of this? The government wants you to either get a SMALL refund or to owe SMALL amount. If perfect it be a like a total break even event!

My comment as a practitioner is that when a taxpayer gets a small refund they may feel like it was a disappointing year. Also some have come to expect a refund which they might use for bills or a vacation.

What should be looked at is the over all percentage of tax paid versus the prior year. . Remember when the government gives you back money! The goal of the new W4 is to stop this from happening.