IRS to introduce a new W-4 Form next month. What to expect?
The Internal Revenue Service is planning to release a new W-4 form that better incorporates the changes introduced by new tax laws.
How it all began
According to the IRS, a draft version of the new W-4 form is expected to be available for public comment by May 31. IRS spokesman Eric Smith says it will be simpler and more user-friendly than the previous version released last May.
The last W-4 asked taxpayers to fill in their itemized deductions, tax credits and outside income. This was done to make the form a more accurate tool for determining the amount of tax that should be withheld.
The draft received a lot of criticism for being too complicated.
“We realized it’s not going to work.We’re going to take another run at this”, said IRS spokesman Eric Smith
Beyond that, the form asked workers to disclose information that wasn’t relevant to their employer, such as income from other jobs.
What to expect from the new format?
So another draft version of the new W-4 is expected by May 31. However, the IRS will also ask for public comment.
“We encourage taxpayers to take advantage of that opportunity and send us comments on the redesign,” says agency spokeswoman Anny Pachner
The IRS will review the comments and plans to post a second draft later in the summer. The final W-4 version will be released by the end of the year in time for the 2020 tax year.
Once the form arrives, you’ll probably need the following information on hand, says Kathy Pickering, executive director of H&R Block’s Tax Institute:
- Your filing status
- Number of dependents
- Information about your itemized deductions such as home mortgage interest, state and local taxes, and charitable deductions
- Earnings from all jobs
- Information about non-wage income such as business income, dividends, and interest.
“If you’re married, and both you and your spouse work, it will also be helpful to know information about your spouse’s income,” says Kathy Pickering, executive director of H&R Block’s Tax Institute
You may also need to fill out a new state income withholding form. Many states use the current W-4 for withholding, but they may need to release their own forms, too.
Earlier, the IRS introduced a successful experiment with the new IRS Form 1040. This new tax form is shorter and easier to file, as a number of unneeded lines for tax provisions were removed (at least until the Tax Cuts and Jobs Act expires at the end of 2025).
The easiest way to file both IRS Form W-4 and IRS Form 1040 is to do so electronically. That way, your forms will be received by the IRS immediately – providing you more time to spend on your tax refund.