2019 W-4 Update
Now that Tax Day has come and gone, you can breathe a sigh of relief. But don’t get too comfortable, big changes are around the corner.
The IRS is preparing to release a new W-4 form that will ensure the amount held back for taxes each paycheck is more accurate. That means come April 2020, taxpayers should not owe money or receive a refund.
What to expect
Last summer, the IRS shared a draft of the new W-4 form seeking feedback from payroll providers and tax prep companies. The biggest change in the draft form is that taxpayers will no longer claim allowances based on exemptions. Instead, workers will input annual dollar amounts for:
- Nonwage income like interest and dividends
- Itemized and other deductions
- Income tax credits
- Employees with multiple jobs: total annual taxable wages for all lower paying jobs in the home
Look for the IRS to share another draft of the new W-4 by May 31, 2019 and ask for taxpayer feedback. Once the comment period ends, the IRS will post an updated draft sometime later this summer.
The IRS will release the final W-4 form at the end of 2019, so taxpayers can prepare for the 2020 tax filing.
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