None

Tax Withholding Estimator Can Help with New W-4

The Internal Revenue Service's Form W-4, also known as the Employee's Withholding Certificate, allows employers to withhold funds from employees' pay for federal income tax. The IRS created a new version of this form for 2020, which generally replaced the worksheets found on older versions of the form with a series of questions. The new W-4 has also done away with withholding allowances.

To accommodate the new version of the form, the IRS has created a new version of its Tax Withholding Estimator. The IRS encourages employees to use this tool as a way of avoiding unexpected tax bills or penalties at the end of the tax year. The estimator has a five-step process, asking its users how they are filing as well as questions about income, adjustments, deductions and tax credits. Users can also select a target refund amount for their taxes, and the tool also provides specific recommendations on how to complete a W-4 based on the user's results.

Withholding updates need to be made using the new version of the W-4. Those who are not looking to make any changes to existing withholdings do not need to fill out a new form.