Tax News 4 Key Things You Need to Know About the New 2020 IRS Form W-4 for Employee Withholding Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Published May 6, 2020 - [Updated Mar 20, 2024] 4 min read You may or may not have heard that the IRS launched a newly redesigned Form W-4 used to adjust federal tax withholding, which is effective starting with the tax year 2020 (the taxes you file in 2021). The IRS created the new Form W-4 Employee’s Withholding Certificate (formerly W-4 Withholding Allowance Certificate) to help taxpayers figure out their correct withholding. This change stemmed from tax law changes like reduced tax rates, changes to itemized deductions, increased Child Tax Credit, the new Other Dependent Credit, and the elimination of dependent and personal exemptions. The IRS is not requiring all employees to complete the new 2020 Form W-4. Instead, they have ensured the federal withholding tables were designed to work with both the new version of the form and existing withholding calculations from prior years. The only employees required to fill out the form are new employees and employees who want to change their withholding. Don’t worry about figuring out the details of the Form W-4 changes and how to calculate your 2020 W-4 withholding. TurboTax has you covered and just launched TurboTax Free Updated W-4 Withholding Calculator to help you easily estimate your withholding. Whether you want a bigger tax refund or smaller balance due at tax time or more money in your paycheck, TurboTax free W-4 withholding calculator helps you easily estimate your withholding and fill out Form W-4 to give to your employer. Updated for 2020, simply enter your information related to your dependents, income, and valuable tax deductions and credits and the calculator will help you adjust your withholding and see how it affects your tax refund and your take-home pay on each paycheck. Although TurboTax Updated W-4 Withholding Calculator helps you easily estimate your withholding here are highlights of four key changes to IRS 2020 Form W-4 : Elimination of Personal Withholding Allowances – One of the biggest changes on the redesigned W-4 form is the elimination of personal withholding allowances. Instead, the form uses a 5-step process and new Federal Income Tax Withholding Methods to determine actual withholdings. In the past, the value of withholding allowances was also tied to personal and dependent exemptions, but those exemptions were eliminated under tax reform. Focus on Dependents and Other Tax Credits – Step 3 of the form allows you to indicate that you are eligible for the Child Tax Credit and the Other Dependent Credit, if applicable. You can also include additional credits like education tax credits in this section to more accurately refine your withholding amount. Account for Additional Adjustments – Step 4 of the form is an optional section where you can: Make adjustments for additional withholding if you have other income like interest, dividend, and retirement income Reduce withholding in this section if you have deductions besides the standard deduction, like itemized deductions, and additional tax deductions, like student loan interest Enter any additional income tax you would like withheld from each paycheck including any amounts that need adjustments because you or your spouse may have more than one job. Exemption Line is Removed – Although there is no longer a separate section to claim an exemption from withholding, you can still claim exemption from withholding by writing “Exempt” in the space below 4C. Form W-4 is completed and submitted to your employer, so they know how much tax to withhold from your pay. Typically, you would file a new W-4 when your personal or financial situation changes. If you have no changes in your current situation you may not need to file the new IRS Form W-4. The IRS has ensured the federal withholding tables were designed to work with both the new version of the form and existing withholding calculations from prior years. If you are impacted by tax law changes, your personal situation or income changed, you started a new job, or you didn’t see the outcome you expected when you filed your 2019 taxes this year you should fill out the new W-4 form. Don’t worry about knowing how to figure out your withholding, you can use TurboTax free W-4 withholding Calculator to easily estimate your withholding and fill out Form W-4. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed. Previous Post Am I Required to File My Taxes to Get a… Next Post Where’s My First Stimulus Check? How to Check the Status Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. 2 responses to “4 Key Things You Need to Know About the New 2020 IRS Form W-4 for Employee Withholding” Now that many people are working from home, what “business-related” expenses can be claimed on 2020 personal taxes? Home office space? Toner, paper, etc.? Are the rules different? What are the rules again? Maybe your readers would appreciate an update, as I would. Just a suggestion … Reply Hi Lee, Unfortunately, if you are an employee you can’t deduct work from home expenses like the home office deduction. Prior to tax reform, you could deduct unreimbursed employee expenses, but beginning with tax year 2018 those deductions were no longer available. If you are self-employed, on the other hand, you can deduct your expenses for working from home. Here is an article we recently published on the topic for more information and for some things you can do if you are an employee https://blog-turbotax-intuit-com-prelaunch.go-vip.net/tax-deductions-and-credits-2/your-top-tax-questions-about-working-remotely-answered-47371/ I hope this helps. Thank you, Lisa Lewis Reply Leave a ReplyCancel reply Browse Related Articles Crypto Understanding Crypto and Capital Gains Work 7 Things You Need to Know About the New Business Report… Work Using Form 8829 to Write-Off Business Use of Your Home Tax Tips Roth 403(b) vs. Roth IRA: Which Should You Invest In? Life Interest Rates, Inflation, and Your Taxes Investments Essential Tax Tips for Maximizing Investment Gains Uncategorized TurboTax is Partnering with Saweetie to Elevate Hoop Dr… Business Small Business Owners: Optimize Your Taxes with a Mid-Y… Small Business The Benefits of Employing Your Children and the Tax Bre… Income and Investments Are Olympics Winnings Taxed?
Now that many people are working from home, what “business-related” expenses can be claimed on 2020 personal taxes? Home office space? Toner, paper, etc.? Are the rules different? What are the rules again? Maybe your readers would appreciate an update, as I would. Just a suggestion … Reply
Hi Lee, Unfortunately, if you are an employee you can’t deduct work from home expenses like the home office deduction. Prior to tax reform, you could deduct unreimbursed employee expenses, but beginning with tax year 2018 those deductions were no longer available. If you are self-employed, on the other hand, you can deduct your expenses for working from home. Here is an article we recently published on the topic for more information and for some things you can do if you are an employee https://blog-turbotax-intuit-com-prelaunch.go-vip.net/tax-deductions-and-credits-2/your-top-tax-questions-about-working-remotely-answered-47371/ I hope this helps. Thank you, Lisa Lewis Reply