There’s another complication coming out later this year: The Internal Revenue Service is changing how you adjust your paycheck withholdings, and early indicators show it won’t be easy.
The agency plans to release a new W-4 form that better incorporates the changes ushered in by the new tax law so that the amount held back for taxes in each of your paychecks is more accurate.
But the changes won’t be simple, says Pete Isberg, head of government affairs at ADP, the payroll and human resources company.
Filling out the new form will be a lot like doing your taxes again.
While the new form hasn’t been released yet, the IRS last summer put out a draft version and instructions seeking feedback from tax preparation companies and payroll firms. Instead of claiming a certain amount of allowances based on exemptions – which have been eliminated – the draft form asked workers to input the annual dollar amounts for:
- Nonwage income, such as interest and dividends
- Itemized and other deductions
- Income tax credits expected for the tax year
- For employees with multiple jobs, total annual taxable wages for all lower paying jobs in the household
“It looked a lot more like the 1040 than a W-4,” Isberg says.
The new form referenced up to 12 other IRS publications to fill it out. It was so complex and different from the previous W-4 form that Ernst & Young worried employees would struggle to fill it out correctly and employers may need to offer training beforehand.Thanks Trump!
Instead of seriously cutting taxes, many will get this new complex layer of time burden added to the tax burden.
-RW
(ht Felix Bronstein)
The post trump taxes made things difficult with regard to withholding. The result was that people have to write a check when they have income other than wages. This means people noticing what they are paying instead of the refund amount. Now government needs a way to again just make it so most people get a small refund. Hence the new form.
ReplyDeleteThe tax refund is what keeps people from getting restive, keeps them on the tax plantation, and enjoy being milked.
ReplyDeleteMy gosh, if you have to write a check to the government instead of receiving a check, you might start having second thoughts about this whole scam. People might start asking unsettling questions as this guy did: https://the-moneychanger.com/answers/the_most_dangerous_man_in_the_mid_south
I always claim maximum deductions regardless of my actual circumstances and keep my money as long as possible.
ReplyDelete