New W-4s are coming, new W-4s are coming!
Yes, it’s true, the IRS has released the second draft of the new W-4 form and the final version is expected to be released November 2019. The purpose of the W-4 form is for all employees to have accurate federal withholding taken out of their paychecks. The IRS has redesigned this form for 2020 and beyond.
Rest assured, BIAS is prepared and working hard to make sure we are ready for the changes to the federal withholding starting in 2020. Soon you will be able to enter the new W4 information as well as continue processing with the existing W-4 in BIAS.
The first question to ask is what is the purpose of a new W-4? The idea supposedly is to allow employees to establish more accurate federal withholding for their paychecks. Time will tell!
Treasury Secretary Steven T. Mnuchin said in a prepared statement, “Our dedicated staff at the Treasury and IRS worked tirelessly over the past year to produce a Form W-4 that is more accurate, transparent and simplifies the tax withholding experience for hardworking Americans… We are proud that the Tax Cuts and Jobs Act lowered taxes for most Americans and are enthusiastic that the improved W-4 will help taxpayers better determine the correct withholding amount for their personal financial situation to more readily reap the benefits of historic tax reform.”
The second question to ask is whether the new W-4 is required to be completed for 2020. Luckily the answer is “no”. You are not required to have your employees complete the new W-4 this year. Federal withholding in 2020 will be calculated based on the new W-4 information if provided by the employee. If employees do not provide a new W-4 form their old W-4 information will be used.
For additional information go to the IRS website at irs.gov and search the internet for articles and webinars. BIAS will also be providing additional information over the next few months. Stay tuned!
Written by Stewart Ganser, CPA, Special Services Lead