Disappointing Tax Return?
Tax season is over for now, and some tax payers may have been disappointed with the size of their tax refund, or worse, surprised that they still owed the IRS money. Changes to the tax code have reduced the effectiveness of the current W4 in helping calculate how much federal income tax should be withheld from an employee’s paycheck. In response, the IRS will be updating the W4 before the 2020 tax season. While the new W4 may lead to better accuracy, the form itself will be far from easy to use.
What is Changing?
The goal of the IRS in releasing the new W4 will be to ensure that tax payers do not owe, or are owed, any money at tax time. In order to accomplish this, the new W4 will ask for information such as:
- Itemized and other deductions
- Expected income tax credits
- Non-wage income
- Total annual taxable wages for employees with multiple jobs
What are the Concerns?
Payroll and tax professionals that were given a draft of the new W4 were concerned that employees would not be able to fill out the form correctly, and that employers would need to offer training sessions. There were also concerns with privacy, as the form asks for spousal and family income, and income from additional jobs or side work that employees may not want to share with certain employers.
How to Prepare?
Another draft version of the new W4 should be published soon, and the final version is expected to be released before the end of the year. Once it arrives, employees will most likely need the following pieces of information to complete the form:
- Filing status
- Number of dependents
- Deduction information
- Total annual earnings from all jobs
- Non-wage income information (dividends, interest, etc.)
- Spouse’s income information (if applicable)
Employees are also encouraged to perform a “Paycheck Checkup” in order to get a better idea of their tax liabilities in order to avoid any unexpected surprises.
Regardless of how much federal income tax needs to be withheld, Time & Pay helps make sure all payroll taxes are filed on time and accurately. Contact us today if you have any questions, or if we can do anything to you stay compliant with IRS or DOL regulations.
About Time & Pay:
Time & Pay is a professional payroll service provider located in Johnson City, TN. We service businesses of all sizes and types throughout the United States. Founded in 1992, Time & Pay provides businesses with complete payroll services, guaranteed payroll tax compliance, automated time and attendance systems and services, pay-as-you-go workers comp, human resource management systems and services, ACA compliance and more. We provide our customers with the cost effective tools you need to better manage your payroll, your employees and your business. Time & Pay’s services guarantee you will save money, time and aggravation and we back them up with the customer service you expect and deserve. Contact Us today to learn why business owners throughout the country are saying:
“Time & Pay! Why would you do payroll and timekeeping any other way?”
Payroll Services in Kingsport, TN; Bristol, TN; Johnson City, TN; 423-854-9042
Payroll Services in Morristown, Greenville, Knoxville, TN 865-640-5666
Payroll Services in Cleveland, Chattanooga, TN 423-794-7855
Payroll Services in Newport News, VA 757-240-2766