The Updated W-4 Form Explained
The W-4 form we have been using for years and years has been revamped. Beginning in 2020, if you are a new hire to a company, you will be given the new W-4 form to fill out. If you follow the form exactly as it’s laid out, filling it out should be a fairly simple process. There are no tricks. The IRS has very clearly laid out instructions in each box for your convenience and guidance.
If you are not a new employee in 2020 (or beyond), your W-4 form will remain the same and you will continue being taxed as you have been. Nothing will change for you. The new form is designed to work seamlessly with the previous form. However, if you decide to change how you file, you will need to fill out the updated form. Talk with whoever does your payroll to ensure you understand it and what it means for your taxes.
Personal exemptions and allowances are no longer a part of the updated W-4 form. You’ll notice that everything is now a dollar amount. Reference the new form here. The updated W-4 is broken into five steps, and you may not need to fill out all five if they don’t apply to you. Read the instructions carefully and use any online resources that could come in handy.
Step One. The filer fills out their own personal information. This is also where the filer will check how they will be filing - Single or Married filing separately, Married filing jointly (Qualifying Widow(er)), or Head of household.
*Steps 2 - 4 only need to be filled out if they apply directly to the filer. If not, the filer can skip down to step five.
Step Two. The filer should fill this out if they work multiple jobs and/or they have a spouse that works.
Step Three. The filer should claim any dependents here. The end result will be a dollar amount. Follow the math as shown to accurately determine the exemption.
Step Four. This is for other adjustments that may come into play for the filer.
Step Five. The filer’s signature and date.
If you’re unsure if you’re filling out the new W-4 form accurately, please talk with whoever does your payroll or another trusted professional. Contact Skynar Bookkeeping today for assistance or questions on the new W-4 form.