W-4 Tax Withholding Taxercises
The IRS is currently preparing a new W-4 Tax Witholding Form for January 2020. For any paycheck tax witholding during Tax Year 2019 eFile.com has prepared the W-4 easy form. You should not have to complete a complicated worksheet but rather use the eFile.com free 2019 tax calculator to determine the number of Allowances for the W-4 form. More on this later.
The current 2019 W-4 Form requires you to enter a number of Allowances – not to be confused with number of Dependents. Allowances will go away in 2020 and you will be asked to enter a Dollar amount of Taxes to be withheld each pay period. During this W-4 Form transition, we at eFile.com work for you and we want you to keep as much of your hard earned money now via your paycheck. As a result please ask yourself which of the following 2019 Tax Return and Paycheck Goals you would like to pursue now.
Below are simple to follow considerations when planning the number of Allowances for your 2019 W-4 Form(s) so you meet your 2019 Tax Return goals in 2020.
You will find two 2019 W-4 case studies, one for Taxes Owed in 2018 and one case for a 2018 Tax Refund. If your 2018 Tax Return reflected one of these scenarios and your 2019 income, deductions, filing status has not or will not change significantly, you can lean on your 2018 Tax Return results when planning your 2019 W-4.
Please let us know any further details or questions you may have to help you tax balance and tax plan. Don’t give your hard earned money to the IRS during the year, only to get it back with your next Tax Return refund. Make sure you provide the information listed below under A, B, C. All of these steps will become easier in 2020 when Allowances will be replaced with tax withholding dollar amounts to be entered on your 2019 W-4(s).
If you owed Taxes on your 2018 Tax Return and your goal is not to owe Taxes on your 2019 Tax Return – due in 2020 – follow the steps below. Financially speaking, if you have the money and money saving discipline, you could save the pay check tax withholding funds and pay your Taxes owed in 2020. Depending on the amount you might owe in 2020 and the money saving interest rate, it might be an option for you. Again, this approach requires saving discipline to avoid potential IRS and State late payment penalties. Otherwise, follow the steps below to plan for a tax balance in 2020.
Please let us know any further details or questions you may have to help you tax balance and tax plan. Financially speaking, you could save the additional $200 in tax withholding and earn interest on the amount and pay the amount of $1,400 in Taxes Owed by the next Tax Day. This however, assumes that you have the discipline to save these funds so you have them available to pay your taxes and avoid potential IRS and state late payment fees. If you require assistance, please make sure you provide the information listed below under A, B, C. All of these steps will become easier in 2020 when Allowances will be replaced with tax withholding dollar amounts to be entered on your 2019 W-4(s).
Research & References of W-4 Tax Withholding Taxercises|A&C Accounting And Tax Services