Updated: Mar 3, 2020
Editors: Hanna Chau Nguyen, Cuong Nguyen
If you are about to fill out a W-4 form, it means you just got a new job or have decided to change your financial situation.
Full W4-Form: https://www.irs.gov/pub/irs-pdf/fw4.pdf
The W-4 is a form published by the Internal Revenue Service (IRS). The W-4 form is provided by employers to new hires to determine how much federal and state income tax to be withheld from an employee’s paycheck.
Why redesign W-4?
The IRS issues the new form W-4 with the purpose of reducing the complexity of the old one. Also, increasing the transparency and accuracy of the withholding system for the IRS. The new form provides less complicated questions by replacing with more straightforward questions that make easier for employees.
In this post, we will provide you some changes on the new W-4 form and how to fill it out
What are the changes on the W-4 form?
The title: From this year 2020, the tittle of the W-4 will be changed to “Employee’s Withholding Certificate”. Allowances are no longer calculated on the form. This is the reason why we will not see the word “allowance” on the title anymore.
Say bye to the Personal Allowance Worksheet: The Personal Allowance Worksheet on the third page of the old form is now gone. In the year of 2018, the Tax Cuts and Jobs Act (TCJA) eliminated personal exemptions. Those exemptions were tied to allowances. Since exemptions are gone, the allowances are gone too.
How to fill out the new W-4 form?
Step 1: Enter Personal information
a) Enter your full name – First name, last name
b) Enter your Social Security number, and mailing address
c) Check mark for your filling status
Note: You don’t need to fill in step 2 through 4 if you are single with only one job, or if you are married and your spouse does not have any job (or does not work). You can skip straight to step 5 to sign and wrap things up.
Step 2: Multiple Jobs or Spouse Works
This step needs to be filled out if you are either (1) holding more than one job at a time, or (2) your spouse also works, and you are married filling jointly.
Holding more than one jobs: check the box for step 2 (c) and move on to step 3 and 4 (b).
Spouse works: use the IRS’s tax withholding estimator to fill this step. Make sure to have your and your spouse’s most recent pay statement and any information from other sources of income.
Step 3: Claim Independents
This part is used to determine your eligibility for the child tax credit. To be eligible, single taxpayers with an income of $200,000 or less, or married filling jointly with an income of $400,000 or less.
On the first box, take the number of your qualifying children who under 17 years old and multiplied by $2,000.
For example: you have 2 qualified children who are under age of 17. Take 2 times for $2,000, which gives you a total of $4,000. Enter $4,000 into the first box.
On the second box, take the number of other independents and multiplied by $500.
For example: you claim 2 other dependents on your tax return. Take 2 multiplied by $500, which gives you a total of $1,000. Enter $1,000 into the second box.
The third box will be the sum of those two numbers.
Step 4: Other Adjustments
This section is optional
(a) Other income (not from jobs): like dividends or retirement income
(b) Deductions: Itemized deductions like mortgages interest or charitable contributions
(c) Extra withholding: extra withholding you would like to withhold on each pay check.
Step 5: Sign the form
If you do not sign the form, it will be invalid.
The new W-4 is straightforward and to the point. We hope this post and the collection of resources about the new W-4 form will help you to complete this form more accurate. If you have any question about how to fill out the new W-4 form, you can email us through our website cnproservices.com.
* Maldonado, Camilo. January 22, 2020. “The 2020 W4 Form and How To Fill Out A W4”.
* Newquist, Caleb. December 13, 2019. “Here’s How to Fill Out the New W-4 Form for 2020”.
* Internal Revenue Service. Irs.gov.