![]() ![]() ![]() Subtract the amount you would have withheld from now to the end of the year if you had the standard amount of tax withheld during that time (this is the amount that your employer would withhold, given your filing status and wage amount, if you left W-4 steps 2 through 4 blank).Subtract the amount of tax you have already had withheld this year (including an estimate of how much more will be withheld before you’re able to submit a new Form W-4).Determine the amount of tax you want withheld this year, which is the sum of your anticipated tax obligation and the amount of refund you prefer (if any). ![]() The recommendations are based on the following steps: Also, the Form W-4 instructions say that when an individual or couple holds multiple jobs at once, the amounts needed on steps 3, 4(a), 4(b), and 4(c) should go on the W-4 associated with the highest-paying job the W-4s for all other jobs should have zeros (or blank) for these four steps, which will result in the standard amount of withholding for the marital status indicated in step 1 of the W-4. Those were the only two possible entries, and employees generally used either one or the other (since those two lines worked in opposite directions). The Tax Cuts and Jobs Act of 2017 eliminated personal and dependent exemptions, and because withholding allowances were equated with exemptions, it was best to move away from using withholding allowances. So, beginning in 2020, Form W-4 offers employees four ways to change their withholding: step 3 to reduce the amount of tax withheld step 4(c) to increase the amount of tax withheld step 4(a) to increase the amount of income subject to withholding and step 4(b) to decrease the amount of income subject to withholding. These four possibilities are all related. For example, steps 4(a) and 4(b) work in opposite directions, so the amounts could be combined into one net amount of additional income or reduction to income. Similarly, steps 3 and 4(c) could be combined into one net amount by which to increase or decrease the amount of tax to withhold. So, there’s no need to use more than two of these four steps on the W-4, and if steps 4(a) and 4(b) don’t apply, then the W-4 may need only one number (on either step 3 or step 4(c)). Form W-4 is used to adjust an employee’s income tax withholding up or down relative to the standard withholding amount, given the employee’s filing status and wage amount. Prior to 2020, employees could decrease withholding by claiming an appropriate number of allowances, and they could increase withholding by entering a specific additional amount to withhold from each paycheck. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |