2020 W4 Conquered!
Hello everyone! As you may or may not know the IRS updated the W4 form in 2020. (This is the document that they use to calculate how much in taxes they should be taking out of your paycheck).
Now, previously you just added up the number of deductions as wrote that in. “I live alone” +1 I have a dependent +1 and so on. But the new form asks you to put in dollar amounts for income you think you’ll get that won’t automatically deduct taxes as well as money you want to deduct from the total your paying taxes on.
For example, if you plan on claiming the standard deduction of 12,000 and you plan on maxing your Traditional IRA (6,000) then you would put in 18,000 which the government would then ignore when calculating taxes.
This sounds simple, which makes sense since their whole purpose in making the update was to simplify things. However, depending on the online calculator you use, or article you read you may see conflicting things about line 4(b) which is where you would put 18,000 in the example above.
Therefore! I have found and attached a calculator that gets your information and provides you with a downloadable pdf of the W4 - so you don’t need to worry about misinterpreting the numbers and writing down the wrong one!
https://www.taxact.com/w4-calculator
