The Form W-4 is now a full page instead of a half page, and yet it's still easier to understand. Employers use these tables along with the information on your Form W-4 to calculate federal income tax withholding. The first step the IRS implemented was to change the withholding tables. When these exemptions deductions were removed in the Tax Cuts and Jobs Act, the Form W-4 no longer estimated the correct amount that needed to be withheld from paychecks as well as it used to. The allowance system was tied to the use of exemptions and deductions on your tax return.The older version relied on calculating a number of allowances that were then used, along with any additional withholding amount desired, to figure out how much federal income tax to withhold from your paycheck.However, the new tax changes don't always work well with the previous version of Form W-4. making the child tax credit available to more people.The Tax Cuts and Jobs Act (TCJA) became law in late 2017 and significantly changed how the federal income tax system works.
Ideally, Form W-4 should make it so you neither owe taxes nor get a refund when you file your tax return - which is what led to it being reworked. Why the IRS made W-4 form changesĭepending on your circumstance, you might have under-withheld and owed money, or received a larger refund than usual when you filed your taxes. We'll go over the changes and what you should know. The IRS made significant changes to the W-4 form in 2020 and the updated form should provide you the means to more accurately withhold federal income tax. Your W-4 is what determines your federal income tax withholding, and making sure it's accurate is the first step in determining whether you get a tax refund or will owe taxes when you prepare your tax return. Whether you're filling out paperwork for a new job or got an email notification from HR, you might have noticed that the W-4 form changed from what you might have been used to. This will adjust your withholding by accounting for the tax impact of the Child Tax Credit and the other dependents credits. If you work one job or hold the highest paying job in your family and you have dependents, claim your dependents in Step 3 of the new form.If you work multiple jobs at the same time or are Married Filing Jointly and both you and your spouse are employed, you should fill out a new Form W-4 for each job.As before, you’ll need to provide your first and last name, Social Security number, home address, and filing status (Single, Married Filing Separately, Married Filing Jointly, or Head of Household).Form W-4 changed because the Tax Cuts and Jobs Act removed personal exemptions, increased the Standard Deduction, and made the Child Tax Credit available to more people.I guess I was concerned because I wondered if I was missing something as well.but I have had no problem entering what I needed to enter in the past. There have been no changes with Deluxe? I have not had any problem in the past, but this year I have sold more stocks as I ditched the financial advisor that cost me a ton of money. Yes, I guess I can just open that and give it a go. Have you used higher versions or just Deluxe? You can always open your old program and see what it's like to enter this type of information.
You mentioned that you've used TT in the past from your employer. Premier has more bells and whistles to walk you through that stuff, in the end they both produce the same Schedule D for you to file.
Whether you feel you need more guidance than that is up to you. It's pretty straight forward in that regard. In Deluxe, it asks you 1) Did you sell any stocks? 2) Enter info from your 1099-B or import from brokerage. But the deluxe and premier version have more tools that are recommended if you have some of these things, correct? Or does it really not matter? The only thing I need out of all you listed is the stock sales.
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