A W-4 form is an IRS form that an employee fills and submits to the employer. The form includes the details of the employees’ accounts so the employer can decide upon the number of paychecks he can withhold for federal taxes. The form is based on the idea of allowances. If an employee claims more allowances then the employer can withhold less from his paycheck and vice versa. An employee can claim more allowances if he has dependents, has a spouse and kids or is employed in a single job. If employees appropriately fill the form by calculating their withhold allowance they can easily avoid a big tax amount in April. They can also avoid paying extra taxes and thus have extra money available throughout the year. 

When Do Employees Fill the Form?

An employee fills the W-4 form when he starts the new job. He needs to fill a new form if there is any financial or personal situation change in his life. Such situations may be the employee is getting married, adopting a child or having a baby, or losing or gaining household income. In such specific situations, it is necessary for employees to update the form. IRS also recommends the employees to fill a new form every year. This is so because every year there is new tax reform and especially it is necessary for them to review the form for the year 2019. 

Why Employees Need to Specifically Review the Tax Reforms of the Year 2019?

In the tax reform 2019, there are a lot of changes that will directly affect a person’s income. These changes include increased standard deductions, eliminated personal exemption and increased child tax credits. Some more changes include limited or discontinued itemized deductions, additional credits for dependents and new tax rates and brackets. 

Why Have the 2019 W-4 Changes Been Postponed?

The early draft of the 2019 W-4 was unnecessarily complicated and might have resulted in taxpayers paying wrong allowances. Therefore the tax professionals decided to postpone the 2019 W-4 draft. The new draft also contains some of the tax-related items that are difficult for any regular taxpayer to understand and foresee. Moreover, the form raised privacy concerns of the employees and therefore needed a halt for some time. After receiving the feedbacks IRS is planning for some changes and draft the new 2020 version that will be more simple and easy to incorporate.

How Can an Employer Help His Employees?

Due to the tax reforms and several changes in the old form, the employees shall need assistance while filling the form. Therefore the employer must provide them with some extra assistance and guidance. The taxpayer will need to do a paycheck checkup by using an IRS withholding calculator to determine the amount of withholding. But till the new and revised form W-4 2020 is coming to the employees and the employer shall have to wait and till then follow the old W-4 2018 form.