W-4 2020 Explained! (Detailed First Look at 2020 W-4 IRS Draft Form!) Link to form can be found here: W-4 2020 IRS Draft Form https://www.irs.gov/pub/irs-dft/fw4--dft.pdf News Update Re: 2020 Tax Form What we know so far.......... W-4 2020 Explained & Privacy Concerns (W4 Tax Form 2020). Learn how the new 2020 W-4 form may impact you and your taxes. Time stamps so you can jump to any point in the video: - Why the W-4 is changing - 1:15 - 2020 Draft form release date - 3:10 - What the IRS is looking for on the 2020 W-4 - 4:30 - My privacy concerns re: the 2020 W-4 - 7:05 - The massive gap in tax knowledge - 10:15 - How to start preparing for new W-4 - 12:20 Related videos to this topic: How to project taxable income: https://youtu.be/JB2J6XIt6xA W-4 and How tax withholdings work: https://youtu.be/qKTYi2Xakx0 Related articles to this topic: https://www.americanpayroll.org/news-resources/apa-news/news-detail/2019/03/22/irs-to-release-a-draft-of-the-2020-form-w-4-by-may-31 https://www.adp.com/resources/articles-and-insights/articles/e/eow-major-changes-to-irs-2019-form-w4-deferred-to-2020.aspx irs-to-release-a-draft-of-the-2020-form-w-4-by-may-31 Major Changes to the 2019 Draft Form W-4 (Now Deferred to 2020) Included: •Number of Allowances Eliminated One prominent proposed change was that the total number of allowances was to be eliminated. •New Marital Status box - Head of Household •Additions to Income A new line asked employees to enter estimated nonwage income not subject to withholding (such as interest and dividends). Currently, employees with nonwage income must convert such amounts to equivalent per-payroll additional amounts to withhold. •Itemized and Other Deductions Another new line asked for estimated subtractions to income based on expected deductions (such as state and local taxes, mortgage interest and charitable contributions). Currently, employees must convert deductions into equivalent withholding allowances. Amounts entered were to be full-year estimated deduction totals, so payroll systems in 2020 may need to include full-year amounts in withholding calculations. • Tax Credits This new line would have asked for the full-year value of any tax credits, such as the child tax credit. Currently, tax credits are translated by employees into additional withholding allowances. With the 2020 Form W-4, full-year tax credit amounts may be directly entered into payroll systems. • Additional Household Income Due to Multiple Jobs If applicable, employees may be asked to enter the income associated with any second job, and/or the annual wage income of any spouse. Today, employees use a Form W-4 worksheet to calculate an additional amount to withhold per pay period to cover the potentially higher tax bracket and tax rates for the combined family income. Employees will continue to be able to enter an additional per-pay period amount to withhold. The IRS plans to issue an “early release” draft of the 2020 Form W-4, Employee’s Withholding Allowance Certificate, for public comment by May 31, said Scott Mezistrano, IRS Industry Stakeholder Engagement and Strategy, on the March 7 payroll industry call. The IRS will welcome comments on the first draft and plans to issue a second draft this summer, followed by the final version later in the year, Mezistrano said. Expect Major Changes With the 2020 Form W-4 The IRS expects the 2020 Form W-4 to more accurately reflect changes made by the Tax Cuts and Jobs Act (TCJA; Pub. L. 115-97). The TCJA, which went into effect on January 1, 2018, significantly altered the federal tax system, including removing personal exemptions. The IRS initially planned to revise the 2019 Form W-4 and released a draft version of the form that contained considerable changes from the 2018 form. However, following feedback from the payroll and tax communities, the IRS announced that it would delay those changes until the 2020 version of the form.