It’s that time of year, when our thoughts turn to hot cocoa, festive meals with family and friends, sitting around a cozy fireside, and… a new W-4 for 2020??! What’s this lump of coal?
Fine, we’ll all have to behave better next year, but in the meantime…
What do you mean, there’s a new W-4?
Though TiM does not provide tax advice or guidance, yada yada, we regret to inform you that the IRS has completely redesigned the W-4 for 2020. And before you say, “Sure sure, I’ve seen this before, change a footnote here or there, no big whoop,” let us hasten to say: This time they’re serious.
All right, what’s changing?
With this change comes the elimination of the most iconic aspect of the old-school W-4: the withholding allowance. That little number you wrote in, from 0 to 9 (or the fabled “Exempt”), to indicate how much or little you wanted withheld from your paycheck for federal income tax.
With the enactment of the Federal Tax Cuts and Jobs Act in December 2017, that little box was targeted for elimination. The 2020 W-4 finishes the job. The withholding allowance number now sleeps with the fishes.
The revised W-4 for 2020 actually makes things simpler if you have no dependents or special work circumstances. The new form has three options; everyone must select one:
- Single or married filing separately
- Married filing jointly
- Head of household
The tricky part comes in the form of new sections that ask for specific withholding-related information/dollar amounts. There are two new worksheets that replace the previous Personal Allowances Worksheet and the Deductions, Adjustments, and Additional Income Worksheet.
How does this affect me and what changes can I expect in TiM?
The short answer is, it doesn’t change anything for jobs you’ve been hired to before 2020 – even if they carry over into the new year. If you have submitted a W-4 for your current crew job(s) in any year before 2020, the IRS says you’re not required to submit a new form merely because of the redesign. Employers will continue to compute withholding based on the information from your most recently submitted Form W-4.
For employment starting in 2020 though, you’ll find some changes in the TiM system.
For example, you’ll no longer see a “number of allowances” field in My Profile. Instead, you’ll see a “View/Edit Default W-4 Info” button that brings you to an interactive version of the new 2020 W-4. As always, you will be able to keep your default W-4 information on file, making it quick and easy to submit your W-4 each time you join a production.
TiM will provide a simple tool to review and update this W-4 info each time you submit a new startwork packet. This will allow you to accurately declare withholdings and keep your W-4 info up to date with your production company employer(s). Some folks may even determine with their tax advisors that to hit the sweet spot for the year, their W-4 answers will differ from one job to the next… TiM makes that easy to do.
We’ll reach out again to let you know when the 2020 W-4 and new functionality is available in TiM.
And one more time, with feeling: TiM does not provide tax advice or guidance. Therefore, we highly recommend reaching out to your tax advisor in advance to understand how best to complete this form when the time comes. You can also play around with the handy withholding estimator at apps.irs.gov – using that may help you get a handle on how different selections will affect your net pay in the new year.
Can’t get enough of that sweet 2020 W-4 info?
Get it from the horse’s mouth: head on over to IRS.gov’s 2020 W-4 FAQs.
Of course, you can always visit our FAQs on the 2020 W-4 in TiM.
If you have questions, I’m here to help.