Since the introduction of the Tax Cuts and Jobs Act, employees have struggled to accurately estimate the amount of federal income tax that is needed to be withheld from their paycheck. This inaccuracy has led to lower than expected tax refunds, as well us unexpected tax bills come tax season. In response, the IRS has created a new 2020 W4 that better incorporates the changes introduced by the new tax code.
The final version of the 2020 W4 can now be found here. The new form offers step-by-step instructions to help employees with:
- Multiple sources of income
- Deductions greater than the Standard Deduction ($24,800 married, $18,650 HOH, $12,400 single)
Employers will use the information their employees provide on the new W4 to calculate how much federal income tax needs to be withheld from each of their paychecks.
What Are Next Steps?
Employees are not required to submit a new 2020 W4 as long as they have previously submitted a W4, and their tax situation has not changed. All employees hired in 2020 and after, or employees who would like to make changes to their W4, must use the most recent version.
For help filling out the form, the IRS hosted a webinar that walks through each section of the W4. In addition, they have provided a Tax Withholding Estimator. This tool is the most accurate and confidential way for employees to calculate their annual tax liability.
Time & Pay’s payroll systems have been updated to accommodate the information provided on the updated W4. We guarantee that all payroll taxes will be filed on time and accurately. Contact us today to learn how we can help you stay compliant!
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?”