While you will need to know the approximate amount of pay for each job, you will enter the additional amount of withholding in Step 4(c) on the Form W-4 for only one of the jobs. Step 2(a): For maximum accuracy and privacy, use the Tax Withholding Estimator at You will generally be guided to enter an additional amount to withhold in Step 4(c).You'll take this amount and enter it onto line 4(b) of the form.Step 2 allows you to choose one of three options, which involve tradeoffs between accuracy, privacy, and ease of use: You'll enter an amount for expected itemized deductions or even student loan interest, deductible IRA contributions and certain other adjustments. This worksheet instructs taxpayers on how to account for their expected deductions in their withholding amount. Follow the instructions and use the tax table included on the worksheet to determine the withholding amount. The worksheet from step 2 is one of the three methods taxpayers can use to determine tax withholding amount when there are multiple jobs (the other two being the IRS' online withholding calculator and a checked box directly on Form W-4). These aren't filed with the IRS like the first page of the W-4, but should be kept with your own records. There are two new worksheets to help taxpayers estimate the proper withholding amount. From there, your employer will take over and put in the appropriate information for the business name, your first date of employment and the employer identification number (EIN). You'll sign and date it once you're finished. You can skip these parts if they don't apply. These are the new sections (with accompanying worksheets) taxpayers can use to accurately calculate their withholding amount for a wide range of individual situations. The main differences between the old Form W-4 and the one for 2020 and beyond are steps 2 through 4 in the middle. Employers will continue to use the information from past W-4 forms to calculate tax withholdings for the employee. The IRS says employees who furnished a W-4 to employers in years prior to 2020 do not need to fill out the redesigned Form W-4. "In order to lower your withholding, you must now claim dependents or use the deductions worksheet," says Josh Zimmelman, managing partner of Westwood Tax and Consulting. Calculating the withholding rate is done another way. More specifically, taxpayers no longer claim personal or dependency exemptions, meaning, the withholding amount is no longer tied to these exemptions. The 2020 redesign was to reflect changes to tax law made in 2017 by the Tax Cuts and Jobs Act. But it's also wise to revisit it periodically as your income, personal situation, and filing status changes. If you're like most employees, you probably last filled out a W-4 form when you were hired at a new company. Here's what's changed in the W-4 and how to fill one out. Getting your withholding amount right is important because it can keep more money in your pocket by not overpaying and ensure you don't have a hefty tax bill when tax season rolls around because you haven't paid enough. While the underlying information is the same, the new W-4 "replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees," according to the IRS. The Internal Revenue Service redesigned it in 2020 in a way that's intended to make things easier and more accurate. If you're filling out a W-4 for the first time in a while, you might notice some changes in the form that tells your employer how much tax to withhold from your paycheck. By clicking ‘Sign up’, you agree to receive marketing emails from InsiderĪs well as other partner offers and accept our
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