Withholding Simplified with the 2020 Form W-4
The newest version of the draft 2020 Form W-4 was released on August 8, 2019, and it is much more transparent and straightforward than the previous version released earlier this year.
Since withholding allowances may be a thing of the past, the IRS changed the name of the form from Employee's Withholding Allowance Certificate to Employee's Withholding Certificate. With the absence of allowances, this form uses your income, including income from multiple jobs and your spouse's income, to determine your withholding amount.
At first glance, the new Employee's Withholding Certificate is much easier to read than previous versions. The page shows a lot of blank space and is laid out in a more digestible format. The left column guides you through five simple steps. The only mandatory steps for everyone to fill out are steps one and five; personal information and your signature. If you fill out these two steps alone, your withholding amount will be based on your filing status and wage amount. You should only fill out steps two through four if they apply to you. This section covers information about multiple jobs, spouse's income, dependents, and other adjustments.
The IRS also released a Tax Withholding Estimator on the IRS website to assist you with adjusting your withholdings. You should use the estimator if you had a high tax due amount, received a large refund or for other various reasons. The new W-4 form suggests you use the Tax Withholding Estimator in step 2 of the form and includes the web address for easier access.
If you have a Form W-4 already on file with your company, there is no need to fill a new one out with the release of the 2020 Form W-4 final draft. However, if you check your withholdings through the Tax Withholding Estimator and realize you want to update your withholdings, you can still use the old Form W-4. The old version is still available until the end of the year.
Symmetry Tax Engine
Because of frequent tax changes and form updates, our taxation experts and software engineers quickly and accurately update the Symmetry Tax Engine. Symmetry Software has already released the second draft of the 2020 Form W-4 for testing in the most recent update of the Symmetry Tax engine for both hosted and on-premise versions. During this time, users can preview the instructions and test parameters in preparation for the new year and the finalized 2020 Form W-4. For more information about the Symmetry Tax Engine, contact email@example.com.