Check out the new W-4 withholding tax form. Really.

0
86

[ad_1]

However, the allowances were based on personal exemptions – an amount that you could deduct for yourself and each of your relatives – and taxpayers will no longer be available under the new tax law.

Instead, the new form guides workers through five steps that aim to consider all sources of income – including part-time jobs, spouse work, self-employment income, and even income from things like dividends and interest – to determine the correct source amount. Employees also provide information about dependent people and tax deductions to optimize retention.

"It's like a small income tax return," said Andy Phillips, director of the Tax Institute at H&R Block.

Some workers may be suspicious of making employers aware of second jobs or sharing details about investment income, said Kelley Long, a consumer finance education advocate at the American Institute of Certified Public Accountants.

To address these concerns, workers can use I.R.S.'s online tax retention estimate. determine how much to retain, or fill out a printed worksheet. The amount is entered in a separate line "Extra Withholding", without details of its calculation. (Estimator and worksheet data will not be shared with the employer.)

Employees can also calculate the amount and then make separate, estimated tax payments to the IRS regardless of whether the paycheck is withheld.

The source estimator asks detailed questions. It is therefore helpful to have last year's tax return along with your last salary deduction. Since new employees may not have the documents at work or would like to consult with a spouse, Mr. Isberg suggests that employers give new employees additional time to fill out the form – possibly by taking it home.

Alternatively, if new employees are in a hurry, they can simply fill out the first step of the form – asking for their name, address, social security number, and registration status – and sign it (step 5), said Isberg. After reviewing your retentions at will, you can submit a revised form to make the necessary changes.