The IRS is changing the way employees will adjust their paycheck withholding – resulting in an even more complicated withholding form.
The new form isn’t out yet, but early indications show that while it will more accurately reflect the new tax structure, it may be a bit of a headache to fill out correctly. Rather than allowing an employee to claim a certain amount of allowances based on exemptions – which have been eliminated – the draft form asks workers to input estimates of the annual dollar amounts for income and deduction items such as:
- Interest and dividends
- Itemized and other deductions
- Income tax credits expected
In addition to the length and complexity of the form, those who have reviewed it also cite privacy concerns. Many employees may not want to reveal spousal income or itemized deduction information to their employers.
The new W-4 form was scheduled to roll out in this summer, but with the numerous issues involved it most likely will not be implemented until 2020.
