Almost three years ago, I wrote an article about the steady decline in the amount of federal income tax withheld from an employee’s check over the past three decades. This was prior to the new 2020 Form W-4 redesign, so I thought it would be interesting to revisit this chart and see its effect. As we saw three years ago, the amount of income tax withheld from an employee claiming Single with One allowance or Married with One allowance has steadily decreased, with the exception of 2009 where there was a sharp decrease that eventually returned to its pre-depression state…
Posts tagged as “Withholding Tax”
There has been no change to the 2021 W-4 Form from the recently re-designed 2020 version, other than the tax table, but there has been a bit of confusion. First off, the IRS encourages the use of the new form, but it is not required for 2021. Employees will find a more accurate withholding and, most likely, enjoy a higher net pay on every check if they do complete a new form. Payroll systems that utilize the new tax withholding table have recently been provided the ability to ‘bridge’ the 2019 and earlier form as if they were the the…
The W-4 form has remained basically unchanged for many decades. For a flashback, here is what it looked like in 1990: https://www.irs.gov/pub/irs-prior/fw4–1990.pdf. Unchanged until now, that is. The IRS has done a complete revamp of the form for 2020 by adding many additional fields for the employee to complete as well as removing ‘number of allowances.’ You may ask how that can be since the number of allowances basically dictated the amount of federal income tax withheld from a paycheck. You need to see the new form to believe it, and here it is: https://www.irs.gov/pub/irs-dft/fw4–dft.pdf. The form asks the employee…
Whew! We dodged a bullet… at least for another year. If you are not familiar with what the 2019 W-4 form could have looked like, then keep an eye out for a future article where we will give it a thorough review as it is now postponed for 2020 by the U.S. Treasury. The new 2019 W-4 form has been published (including the Spanish W-4(SP) version) and not much is changed from the 2018 version. A Form W-4 remains in effect until the employee gives you a new one, so you do not need to obtain a new form each year. When…