Check Your 2020 Withholding!
Ernie Neve, CPA
January 20, 2020
The Treasury and the IRS redesigned the W-4 withholding form in the wake of the Tax Cuts and Jobs Act, which eliminated the traditional exemptions for dependents and the taxpayers themselves along with a host of deductions. Many taxpayers discovered this year as a result of the changes that they unexpectedly ended up owing taxes because they didn’t have enough money withheld from their paychecks last year. The IRS urged taxpayers to do a “paycheck checkup” last year using an online withholding calculator, but the process was complicated and relatively few taxpayers did it. Earlier this week, the IRS unveiled an improved Tax Withholding Estimator tool to aid in the process (see IRS offers a new tax withholding estimate tool).
The IRS is once again urging taxpayers to do another paycheck withholdings checkup this year to ensure they have the correct amount withheld for their personal tax profile.