If you’re starting a new job in 2020 you’ll have to fill out new form in order to ensure your tax liability is correct and that you receive your full refund when next tax season rolls around. Tax audit reviews the new W-4 form, and what you need to know in order to avoid an overly large tax bill. Tax audit reviews state and federal returns for taxpayers under threat of an IRS audit in order to protect their interests and navigate their audit successfully and affordably.
New hires in 2020 will have to fill out a new W-4 form to ensure the appropriate amount of income is withheld by the IRS. Here is what you need to know about the new form.
CHECK YOUR PREVIOUS TAX RETURNS
Your previous W-4 form will have a category for “allowances,” where you select the number of people you claim, which tells your employer how much to withhold from your income for taxes. The more allowances you select, the less money is withheld. The new W-4 form has sections where you give all of your sources of income and multiply the number of children/dependents by the maximum deduction. This gives taxpayers a clearer view of the amount being withheld.
If you are unsure how to fill out the form, particularly if your returns are highly complex, it will help to look at your previous tax returns to make accurate assessments of the amount of additional income from retirement accounts, interest, etc.
USE THE IRS WITHHOLDING ESTIMATOR
If you aren’t sure how much should be withheld from your income, check the IRS Withholding Estimator tool – a calculator that helps you avoid an unnecessarily large tax bill.
MAKE SURE YOUR SPOUSE IS ON THE SAME PAGE
Coordinate your W-4 information with your spouse to make sure neither of your is under-withheld. Also, decide which of you is claiming household and dependent deductions. Duplications of this information could cause problems later on.