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IRS releases 2019 draft Form W-4

In June, the IRS released a draft version of the 2019 Form W-4 (Employee’s Withholding Allowance Certificate), and instructions for individual taxpayers to determine their income withholding for 2019. The IRS also continues to remind taxpayers to check their 2018 federal income tax withholdings in light of the new Tax Cuts and Jobs Act. It is expected that an updated "final" draft will be issued in Mid-August with hopes to release the actual form in November. 

The federal tax overhaul made significant changes to tax rates, deductions and income tax withholding calculations. The draft issued serves as an attempt to simplify the task of determining income tax withholdings for individual taxpayers as a result of the Tax Cuts and Jobs Act.

One highlight of the new draft includes the exclusion on the form for a place to report the number of allowances claimed. Additionally, the “Personal Allowances Worksheet,” the “Deductions, Adjustments and Additional Income Worksheet,” and the “Two-Earners/Multiple Jobs Worksheet” have all been eliminated.

The updated form adds lines for optional reporting by the taxpayer of nonwage income not subject to withholding, itemized deductions and other deductions and credits, and wages of members of the taxpayer’s household that have lower-paying jobs.

The proposed draft also condenses the form to less than two pages, whereas the 2018 Form W-4 and instructions were four pages.

The IRS and Treasury stated that taxpayers and employers can continue to use the current W-4, and have said they their goal is to make the system “backwards compatible” so that taxpayers who are satisfied with their current withholding don’t have to file a new one.

Keep in mind that the draft form/instructions are only an initial blueprint and could be revised as the IRS receives feedback.

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