New W-4 tax form explained
SALISBURY, Md. – For the first time in almost three decades, a tax form that every employee uses received an update.
The W-4 form is used to figure out the correct amount of withholding from your paycheck. Employees can update it every year and of course fill it out when they get a new job. The form looks different this year to reflect the changes that President Donald Trump made to the tax system in 2017. Overall, the new form asks more specific questions in order to fine tune withholdings and avoid surprises when you file your taxes. But there are ways to prepare ahead of time.
“Because the new form takes into account the adjustments, deductions and credits the best thing you can do is get your previous pay stubs and also go online to the IRS W-4 calculator. Put in all the information they give you and it will actually determine the correct amount for you,” says Matthew Bossle, a CPA at Twilley Rommel & Stephens in Salisbury.
Experts say it’s best to update a W-4 after completing your tax return since all your information is easily available. However, don’t wait to update it if you are filing a return in April. As the saying goes: the earlier the better.
Click here for the IRS W-4 Calculator.
Click here for a sample W-4 form for 2020.