10 Things Every Worker Needs to Know About the New W-4 Form for 2020
The IRS had plenty of unhappy customers during the 2019 filing season. A lot of people who got tax refunds in previous years were shocked to discover that they had to pay taxes when they filed their 2018 tax return. The 2017 tax reform law reduced tax rates, doubled the standard deduction, and increased the child credit, which lowered the overall tax bill for many people...but the IRS also reduced the amount of tax withheld from wages in an effort to synchronize withholding with these tax law changes. Things didn't quite work out as planned, though, and many people didn't have enough taxes withheld from their paychecks in 2018 to cover the taxes they owed.
To avoid this problem going forward, the IRS overhauled the process for determining how much federal income tax an employer must withhold from an employee's paycheck. As part of the fix, there's a new Form W-4 for employees to use starting in 2020. It's quite a bit different than the old form, but don't panic--we'll help you out. Here are 10 things you need to know about the new W-4 form. Take a look so you can tackle this new form with confidence.
There Are No More Withholding "Allowances"
The biggest change is that you don't use the W-4 form to claim withholding "allowances" anymore. On the old W-4,
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