Form W-4 Employee’s Withholding Allowance Certificate is updated for 2020 and beyond till further notice from the IRS. The form itself hasn’t changed much but if you’ve completed a W-4 in the past, you may find the new form a little bit confusing. The only thing that has changed is the structure of the form but its purpose remains the same.
On Step 1 of the form, you’ll need to detail your Full Name, Address and filing status. In the previous form, you could select your filing status as married but would withhold at a higher rate has been removed. Instead, you only check your filing status and that’s it.
Step 2 is about your secondary or third jobs if there is any and your spouse’s work. This is only for those who hold more than one job or married filing jointly and if your spouse also works. The correct amount of taxes that will be withheld in the future depends upon income earned from these jobs.
There are also sections related to Child Tax Credit and dependents on Step 3 of W-4. On this part of the form, you need to multiply the number of qualifying children under 17 with $2,000 which is the Child Tax Credit amount for 2019 taxes. For dependents, you’ll need to multiply the number of dependents by $500.
This only applies to you if you can claim these credits and deductions.
If you don’t want your other income not to be subjected to withholdings, you can do so by entering the amount of other income. The other income refers to income that isn’t coming from jobs. It can be money you’re receiving from a property, interest, retirement income, etc.
Sign the Form and enter the date of the day you completed the W-4. If you’re an employer, enter your Employer Identification Number and First Date of Employment.
Form W-4 Employee’s Withholding Allowance and Certificate have been revisioned by the IRS. For the rest of 2020, the new W-4 must be used. Those who want to keep their current withholdings can do so without the need for issuing a new W-4. The old form is now replaced with a much simpler W-4 that guides you step by step. Here is what the new Form W-4 for 2020 contains.
Step 1: Personal Information
Step 2: Spouse Works or Multiple Jobs
Step 3: Claiming Dependents
Step 4: Other Adjustments
Step 5: Signature and Employer Information
Every step of the way speaks for itself. One thing to keep in mind is that when you’re completing Step 2, make sure that you check the box on Step 2 if there are two jobs total. Also, under Step 4’s (a) part, the other income refers to income, not from jobs. This can include interests, retirement income, or dividends. So make sure that you separate this kind of income from your job if you have any.
Other than these changes, Form W-4 has been made simpler to complete. The IRS website’s FAQ (Frequently Asked Questions) section refers to changes in W-4 as “The new design reduces the form’s complexity and increases the transparency and accuracy of the withholding system. While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees.”
Need more instructions on filing the Form W-4? Make sure you to visit the updated instructions on Form W-4.
Form W-2 Wage and Tax Statement Form is one of the IRS forms that must be completed as part of the employment relationship. Employees use W-2 to prepare their tax returns as it shows all types of incomes received from the workplace and tax withholdings. You as an employee should receive the W-2 completed by your employer sometime in January.
If you don’t receive your W-2 by the end of January, you need to contact your employer as the due date for filing W-2 for employers is January 31st every year. In case your employer doesn’t provide it to you when you file your taxes, the IRS will be on your side and late filing penalties or fees are not going to be reflected on you.
How to get Form W-2?
Employers who are going to complete W-2 for the first time should take a look at the form’s instructions. You can visit the IRS instructions for it but it doesn’t detail every box that needs to be completed. Instead, read this article to see full instructions for completing Form W-2 in 2020.
Obtaining Form W-2, on the other hand, you can purchase a copy of it from most office supply stores but why pay extra when you can file electronically? Social Security Administration offers a wide range of online tools that you can handle your paperwork online. For this, you can also read the above instructions to find how to use Business Services Online from SSA.
Those who want to file the form by hand need to first buy a complete Form W-2 from an office supply store or print it off yourself by getting the PDF file from the IRS website. You can do this by downloading Form W-2 or printing it off directly off of your browser without the need for any third-party software from the link down below.
How you file your W-4 Form, Employee’s Withholding Allowance Certificate highly depends on your how much tax you want it to be withheld from your every paycheck. If you claim zero allowances while you’re single, more taxes will be withheld from your paycheck if you were to claim one allowance.
Although there are no limits to how many allowances you can claim, your filing status plays the majority of the role. If you’re married with two kids, your allowances should be more because you would need more cash flow into your pocket. Each employee is required to file their W-4 on the first day of their job.
When the time comes for filing, you will enter basic information like name, address, SSN, and your filing status. Along with single and married options, you will see another option detailing “Married, but withhold at a higher Single rate”. You should check this box if you’re worried about not withholding enough taxes. It is recommended for married couples who both work.
The fourth box will detail name changes if you’ve recently changed your name or got married. This only goes for if you did not update your Social Security card after the name change. Lastly, you will enter your total allowances. If you can’t decide how many allowances to claim, read below.
How many allowances should you claim?
In most cases, you can determine how many allowances you can claim by looking at the list below.
If you’re single and have only one job, married filing jointly but have one job and your spouse doesn’t work, you can throw another allowance there.
Four allowances for each child you can claim Child Tax Credit for.
If you have dependents, add one allowance for each dependent you have.
One allowance for yourself.
One allowance if you’re filing jointly.
One allowance if you’re filing as head of household.
You should consider your situation and claim allowances the way that you need to. Always remember if you underpay, you are highly likely to be subjected to underpayment penalties which you want to avoid. So make sure you’re withholding enough tax and getting a good amount of tax refund.
In general, there are no obligations on your end as an employee to submit a new W-4 after the company files it. So you do not need to submit a new W-4 Form if you’re comfortable with your how many allowances you claim.
However, there are times where you need to submit a new Withholding Allowance Form. These situations include getting divorced or married, picking up a second or even third job, having a child or adopting a child.
Since all of these scenarios will change how many allowances you claim from the IRS point of view, submitting a new W-4 is the best way. Another way to determine if you should remain how many allowances you claimed throughout the year is to take a look at your tax return. If you withheld too much or less tax, you can submit a new W-4 so you don’t withhold too much tax or vice versa.
With that being said, the short answer to whether you need to file a new W-4 each year or not is no. If you like how much tax is being withheld from your paycheck, you can just keep it the way it is.
Keep in mind once you submit a new W-4 to your employer, it will take effect in the next three day period. Overall, you should monitor how much tax is being withheld from your paycheck.
Given that the IRS made it mandatory for every employee across the nation because it is required that you to pay your taxes gradually throughout the year, the W-4 Form is very important. So it should be treated as such or you might be facing underpayment penalties if you don’t withhold enough taxes.
If a company hired a freelancer or a private contractor, the IRS requires them to include the Taxpayer Identification Number of the freelancer on their 1099 Form. Although this only applies if the company paid more than $600 throughout the year, any given time a company requests the document from a freelancer, the contractor is obligated to submit the form.
Since this is another form that is controlled by the IRS, it can be obtained by the agency’s website. Unlike W-4 Form which allows an employer to withhold allowances from employee’s paychecks, there is no financial value to the W-9 Form.
W-9 Request for Taxpayer Identification Number
The W-9 Form consists of a series of questions made up of name, address, and tax classification of the freelancer. On Part 1 of the form, as seen below, Social Security Number or the Employer Identification Number, also known as TIN must be entered.
Not filing this form upon the payor’s request will result in penalties. For each time the contractor doesn’t submit the W-9, a $50 penalty will be subjected. Also, since this prevents the payor from preparing their 1099 Form properly, the payor will be able to withhold 28% of the freelancer’s earnings and forward it to the IRS.
So the importance of the W-9 Form goes beyond what most might think.
How to get printable W-9 Form 2020?
As with any other IRS document, you can get the form in PDF file from the IRS website. By clicking the link down below, you can get the form in PDF. The form can be viewed without the need for a PDF opener. Once you open the form on a new tab, press CTRL+P or click the printer button at the top right corner to print off.