Yo fuckers, they changed the W4.

[PersonAndStuff]

https://www.irs.gov/pub/irs-pdf/fw4.pdf

I know because it's kind of related to my job. And also it is related to all of your jobs, if you're in the US. They made it harder(more obvious that you're lying) to claim a lot of exemptions. A lot of people claim something crazy like single 9, which really knowing what the 9 means. They also made it less obvious how to claim exempt, for similar reasons.
You can also put in Other Income, which should increase your withholding so you're covered for a 1099 side gig.

Probably for the best, I assume this redesign started in 2015.

 

[Kevers]

Does this affect people who only claim 0?

 

[Lump]

Payroll companies (like the payroll company that is my employer) have been working throughout the year prepare employers for these changes.

https://www.paylocity.com/2019/12/10/irs-releases-final-version-of-2020-form-w-4/

Fun fact: We should've had the new form in 2018, but HR departments everywhere basically revolted because of the way the form draft revealed additional income.

This is the second time the IRS has attempted to revise the form. In early 2018, a draft of the 2018 Form W-4 was released. This form raised concerns in the payroll community about employee privacy in disclosing additional income and the need for more simplicity within the instructions and worksheets. Based on this feedback, the IRS decided to pull the 2018 draft in September 2018 and delay publishing a revised Form W-4 until 2020.

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[Deleted member 9135]

Good info.

So, currently, my 2020 filing is showing that I am due for a five figure return. If this

"Instead, employees will provide employers with amounts to increase or decrease taxes and amounts to increase or decrease wage income subject to withholding."

...is true, i think it may help me. But i would have to fill out the new form despite the fact I have been with the company for 6 years, correct?

 

[Nida]

https://www.irs.gov/pub/irs-pdf/fw4.pdf

I know because it's kind of related to my job. And also it is related to all of your jobs, if you're in the US. They made it harder(more obvious that you're lying) to claim a lot of exemptions. A lot of people claim something crazy like single 9, which really knowing what the 9 means. They also made it less obvious how to claim exempt, for similar reasons.
You can also put in Other Income, which should increase your withholding so you're covered for a 1099 side gig.

Probably for the best, I assume this redesign started in 2015.

Click to shrink...

Do you know much about 1040's?

 

[PersonAndStuff]

Payroll companies (like the payroll company that is my employer) have been working throughout the year prepare employers for these changes.

https://www.paylocity.com/2019/12/10/irs-releases-final-version-of-2020-form-w-4/

Fun fact: We should've had the new form in 2018, but HR departments everywhere basically revolted because of the way the form draft revealed additional income.

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I also work for a payroll company. Not my department exactly but I'm pretty sure we very recently started preparing for this change. We're not very good.

 

[Septimus Prime]

So, will we need to redo the form when the new one rolls out?

 

[PersonAndStuff]

Do you know much about 1040's?

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Eh, I worked for a CPA for a bit so yes but mostly that's old info. I'm sure there are plenty of knowledgeable people on ERA who would help/mock you if you made a thread asking for help.

 

[Nida]

Eh, I worked for a CPA for a bit so yes but mostly that's old info. I'm sure there are plenty of knowledgeable people on ERA who would help/mock you if you made a thread asking for help.

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I mentioned how much money I make in a thread and how much I pay in taxes and someone said if I only make $1,250 as a freelancer working from home I should be paying $1,500 in taxes. But they did not respond to my response unfortunately.

Just not sure if it's worth it to go to a professional.

 

[moncho13]

Can someone explain to me like I'm 5

 

[GoldenEye 007]

Can someone explain to me like I'm 5

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W4 is basically a form you fill out with your employer that defines how much taxes are to be taken out each paycheck. Too much and you'll get a big refund by giving the government an interest free loan. Too little, and they'll ding you for not having enough tax withheld.

Seems like here they are making it harder to claim a lot of exemptions. More exemptions, the more you're "exempt" from withholding taxes so less is taken out each pay period.

 

[Negaduck]

God speed everyone who works in payroll.

I worked in the payroll industry for 8 years before I got out.

God speed all. God speed.

 

[Clay]

W4 is basically a form you fill out with your employer that defines how much taxes are to be taken out each paycheck. Too much and you'll get a big refund by giving the government an interest free loan. Too little, and they'll ding you for not having enough tax withheld.

Seems like here they are making it harder to claim a lot of exemptions. More exemptions, the more you're "exempt" from withholding taxes so less is taken out each pay period.

Click to shrink...

But you'll still end up owing the same amount in taxes at the end of the year, so while you'll have less taken out of each check you receive you'll also likely owe taxes at the end of the year, especially if you're claiming single 9 like the OP's example (why in the hell would anyone do that?).

It baffles me how little most people know about taxes. I got into a pretty heated argument with an uncle a few years ago at Christmas. He was telling us how he was offered a promotion at work but turned it down because it would have put him juuuust into the next highest tax bracket, so he'd actually money. Everyone accepted this, and when I explained that you only pay taxes on the money in each bracket, making it impossible to earn less after a pay raise, he got pissed off and said I had no idea what I was talking about. Everyone else at the table backed him. Whether it's because they were equally clueless or whether they just wanted the argument to end I'm not sure, but it blew my mind that ANYONE made it middle age believing that that's how tax brackets work.

 

[moncho13]

W4 is basically a form you fill out with your employer that defines how much taxes are to be taken out each paycheck. Too much and you'll get a big refund by giving the government an interest free loan. Too little, and they'll ding you for not having enough tax withheld.

Seems like here they are making it harder to claim a lot of exemptions. More exemptions, the more you're "exempt" from withholding taxes so less is taken out each pay period.

Click to shrink...

Ohhhh gotcha thanks. This is Typically included with new hire paperwork isn't it? I guess it's been a while since my last hired date. I mistakenly thought of W2 originally

 

[Damaniel]

So if you're single, or married where only one person works, and have no kids, you pretty much just sign the form and do nothing else now? Weird.

 

[reKon]

But you'll still end up owing the same amount in taxes at the end of the year, so while you'll have less taken out of each check you receive you'll also likely owe taxes at the end of the year, especially if you're claiming single 9 like the OP's example (why in the hell would anyone do that?).

It baffles me how little most people know about taxes. I got into a pretty heated argument with an uncle a few years ago at Christmas. He was telling us how he was offered a promotion at work but turned it down because it would have put him juuuust into the next highest tax bracket, so he'd actually money. Everyone accepted this, and when I explained that you only pay taxes on the money in each bracket, making it impossible to earn less after a pay raise, he got pissed off and said I had no idea what I was talking about. Everyone else at the table backed him. Whether it's because they were equally clueless or whether they just wanted the argument to end I'm not sure, but it blew my mind that ANYONE made it middle age believing that that's how tax brackets work.

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I would have bitch slapped each and every single one of them. This post scares me. How old are your family members?

 

[GoldenEye 007]

But you'll still end up owing the same amount in taxes at the end of the year, so while you'll have less taken out of each check you receive you'll also likely owe taxes at the end of the year, especially if you're claiming single 9 like the OP's example (why in the hell would anyone do that?).

It baffles me how little most people know about taxes. I got into a pretty heated argument with an uncle a few years ago at Christmas. He was telling us how he was offered a promotion at work but turned it down because it would have put him juuuust into the next highest tax bracket, so he'd actually money. Everyone accepted this, and when I explained that you only pay taxes on the money in each bracket, making it impossible to earn less after a pay raise, he got pissed off and said I had no idea what I was talking about. Everyone else at the table backed him. Whether it's because they were equally clueless or whether they just wanted the argument to end I'm not sure, but it blew my mind that ANYONE made it middle age believing that that's how tax brackets work.

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Oh yeah if it wasn't clear, I put before that while less is taken out, if too little is, you could get a penalty for that. So yeah the tax owed is the tax owed for sure.

And lmao on the salary story. Incredible. I get that taxes are complicated and they are, but to not even get the basics? I bet the boss was like.....uhhhh sure guy.

Ohhhh gotcha thanks. This is Typically included with new hire paperwork isn't it? I guess it's been a while since my last hired date. I mistakenly thought of W2 originally

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Yup. It's one of things people do the one time when hired then forget to adjust as life changes happen.

 

[PersonAndStuff]

I mentioned how much money I make in a thread and how much I pay in taxes and someone said if I only make $1,250 as a freelancer working from home I should be paying $1,500 in taxes. But they did not respond to my response unfortunately.

Just not sure if it's worth it to go to a professional.

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I assume you missed or added a zero somewhere. Either way, yeah, your taxes should be super simple. You just need to use tax act or some other website. Accountant is overkill for most people. And you'll owe federal income tax at the lowest rate plus self employment tax.

 

[AcademicSaucer]

forms? what year is it? shouldn't the government already know how much you should pay and just send you the bill, giving you a chance to fight it if you thinks is wrong of course

 

[Giolon]

forms? what year is it? shouldn't the government already know how much you should pay and just send you the bill, giving you a chance to fight it if you thinks is wrong of course

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Yes, but the tax prep industry is a powerful lobby and work hard to prevent that.

 

[Clay]

I would have bitch slapped each and every single one of them. This post scares me. How old are your family members?

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Average age probably around 40, but a mix of people around 20ish on the low side to 80ish on the high side.

Oh yeah if it wasn't clear, I put before that while less is taken out, if too little is, you could get a penalty for that. So yeah the tax owed is the tax owed for sure.

And lmao on the salary story. Incredible. I get that taxes are complicated and they are, but to not even get the basics? I bet the boss was like.....uhhhh sure guy.

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Actually his boss was the person who fed him the story. That's why it became an argument. He told the whole table the story about how his boss did him a solid and explained how taking the promotion would actually be bad, then later I told him more privately that he should consult a professional about the situation since that's not how taxes work. He very quickly got worked up, hit me a few variations of "You're full of shit, I trust my boss, he would never lie to one of his employees," etc. I guess maybe the boss was ignorant about taxes too, I never bothered following up to see if my uncle took my advice and what came of it.

 

[BobLoblaw]

Mmhmm. I know some of those words.

 

[Septimus Prime]

Average age probably around 40, but a mix of people around 20ish on the low side to 80ish on the high side.



Actually his boss was the person who fed him the story. That's why it became an argument. He told the whole table the story about how his boss did him a solid and explained how taking the promotion would actually be bad, then later I told him more privately that he should consult a professional about the situation since that's not how taxes work. He very quickly got worked up, hit me a few variations of "You're full of shit, I trust my boss, he would never lie to one of his employees," etc. I guess maybe the boss was ignorant about taxes too, I never bothered following up to see if my uncle took my advice and what came of it.

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I'm all likelihood, he did know it, and either he found out later, after it was too late to reverse course, and then felt stupid, or--more likely--he never earned the promotion in the first place and just made up that story to not feel bad about it. You probably hit a sore spot by pointing it out.

 

[Z-Beat]

I claim 0. Does this affect me?

 

[Clay]

I'm all likelihood, he did know it, and either he found out later, after it was too late to reverse course, and then felt stupid, or--more likely--he never earned the promotion in the first place and just made up that story to not feel bad about it. You probably hit a sore spot by pointing it out.

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He definitely didn't feel stupid, and it wasn't too late to reverse course. He had been offered the promotion and had the conversation with his boss just a few days prior to the conversation. The story was more like "I was offered a promotion but I'm turning it down," not "I was offered a promotion awhile ago and didn't take it." I would be shocked if he made the whole story up, that's not his character at all.

Edit: Not sure why you think any of this, but after rereading my post to see if I somehow insinuated any of this I can clarify what I meant by later. We were all eating dinner, he told his story openly to everyone, then like fifteen minutes later when everyone was talking to their neighbor and no one person was the center of attention I told my uncle he should check into the situation. We were sitting more or less directly across from each other. When I said later I didn't mean the next day or week or something.

 

[Septimus Prime]

He definitely didn't feel stupid, and it wasn't too late to reverse course. He had been offered the promotion and had the conversation with his boss just a few days prior to the conversation. The story was more like "I was offered a promotion but I'm turning it down," not "I was offered a promotion awhile ago and didn't take it." I would be shocked if he made the whole story up, that's not his character at all.

Edit: Not sure why you think any of this, but after rereading my post to see if I somehow insinuated any of this I can clarify what I meant by later. We were all eating dinner, he told his story openly to everyone, then like fifteen minutes later when everyone was talking to their neighbor and no one person was the center of attention I told my uncle he should check into the situation. We were sitting more or less directly across from each other. When I said later I didn't mean the next day or week or something.

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I just thought, based on your description, it sounded like his reaction was more ego-driven than from ignorance, but it's not like I know him at all like you do. Sorry if I offended you; that was definitely not my intent.

 

[Zoe]

forms? what year is it? shouldn't the government already know how much you should pay and just send you the bill, giving you a chance to fight it if you thinks is wrong of course

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How would the employer know how much to deduct each paycheck? You pay throughout the year, not just at the end.

The amount isn't always accurate because prior to this people with multiple sources of income didn't have to disclose how much income they're receiving outside of the job they're filling out the form for.

 

[Lump]

There were definitely issues with people incorrectly increasing (or even maxing out) their exemptions and then wondering why they owe so much when tax time came. A clearer system was overdue.

 

[Cels]

idk if any americans here (as i assume most people here are) have ever lived abroad but many other countries don't have this arduous rigmarole of having to prepare your taxes yourself. the IRS, or rather, the equivalent agency in other countries, has all the information, and some of them even just do it for you (norway, japan, new zealand, etc). imagine that.

it's too bad the US is beholden to people who don't want to make the tax code simpler and the money from H&R block and other tax prep companies

 

[canseesea]

But you'll still end up owing the same amount in taxes at the end of the year, so while you'll have less taken out of each check you receive you'll also likely owe taxes at the end of the year, especially if you're claiming single 9 like the OP's example (why in the hell would anyone do that?).

It baffles me how little most people know about taxes. I got into a pretty heated argument with an uncle a few years ago at Christmas. He was telling us how he was offered a promotion at work but turned it down because it would have put him juuuust into the next highest tax bracket, so he'd actually money. Everyone accepted this, and when I explained that you only pay taxes on the money in each bracket, making it impossible to earn less after a pay raise, he got pissed off and said I had no idea what I was talking about. Everyone else at the table backed him. Whether it's because they were equally clueless or whether they just wanted the argument to end I'm not sure, but it blew my mind that ANYONE made it middle age believing that that's how tax brackets work.

Click to shrink...

I'd be shocked if this belief isn't held by a majority or near majority of people. It's a common fear I've heard about raises and even overtime pay. People are largely clueless about taxes, they just know they like to complain about taxes.

 

[Razgriz417]

https://www.irs.gov/pub/irs-pdf/fw4.pdf

I know because it's kind of related to my job. And also it is related to all of your jobs, if you're in the US. They made it harder(more obvious that you're lying) to claim a lot of exemptions. A lot of people claim something crazy like single 9, which really knowing what the 9 means. They also made it less obvious how to claim exempt, for similar reasons.
You can also put in Other Income, which should increase your withholding so you're covered for a 1099 side gig.

Probably for the best, I assume this redesign started in 2015.

Click to shrink...

9? pff

im in hr, the max ive seen at my last company was 48 last year

 

[GalvoAg]

People are largely clueless about taxes, they just know they like to complain about taxes.

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Pretty much, also most people think they're doing good when they get a big refund. I cry a little inside for these people.

 

[TrailerParkRanger]

RIP my cousin who is a tax accountant. I won't bother him, but holy shit the olds int he family that will be bugging that poor guy.

 

[Manbig]

https://www.irs.gov/pub/irs-pdf/fw4.pdf

I know because it's kind of related to my job. And also it is related to all of your jobs, if you're in the US. They made it harder(more obvious that you're lying) to claim a lot of exemptions. A lot of people claim something crazy like single 9, which really knowing what the 9 means. They also made it less obvious how to claim exempt, for similar reasons.
You can also put in Other Income, which should increase your withholding so you're covered for a 1099 side gig.

Probably for the best, I assume this redesign started in 2015.

Click to shrink...

I don't know anything about taxes. Mind clarifying what "single 9" means?

 

[Valus]

So do we have to redo the W4 whenever this rolls out? I just checked my company's W4 and it's still the old version.

 

[captive]

god i hate this shit.

im pretty sure my HR people fucked mine up at my new job in june. I did married and 0 and they put me as single and 0. How screwed am i when we go to do our taxes?

also for 2021 i dont want to owe, what do i do to do accomplish that?

 

[Razgriz417]

god i hate this shit.

im pretty sure my HR people fucked mine up at my new job in june. I did married and 0 and they put me as single and 0. How screwed am i when we go to do our taxes?

also for 2021 i dont want to owe, what do i do to do accomplish that?

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just fyi, you can change your taxes at any time during the year. Ask your payroll dept what you are set as (if you can't see it yourself) and make changes if necessary.

I had one dude who was getting commission checks every month and would freaking change is withholdings every 2 weeks so that the paycheck in which he got his commission would be taxed differently, didn't really make sense to me but he did it...

 

[PoppaBK]

Can't you just take as many exemptions as you want? I always just do the number of exemptions that the worksheet gives as I don't have the time to figure out the optimal, but I thought you could give whatever number you wanted within reason.

 

[DJChuy]

It was weird filling out my name and then just signing it. Too lazy to figure out how it'll affect me.

 

[Zoe]

Can't you just take as many exemptions as you want? I always just do the number of exemptions that the worksheet gives as I don't have the time to figure out the optimal, but I thought you could give whatever number you wanted within reason.

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You technically can. If you underpay by too much though, you get fined.

This form shifts to dollar amounts instead of number of exemptions.

 

[sphagnum]

forms? what year is it? shouldn't the government already know how much you should pay and just send you the bill, giving you a chance to fight it if you thinks is wrong of course

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This is America.

 

[captive]

just fyi, you can change your taxes at any time during the year. Ask your payroll dept what you are set as (if you can't see it yourself) and make changes if necessary.

I had one dude who was getting commission checks every month and would freaking change is withholdings every 2 weeks so that the paycheck in which he got his commission would be taxed differently, didn't really make sense to me but he did it...

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i know i can change it anytime, im saying i just found out that my job i started in june did it wrong and now im freaking out about the possibility of owing a bunch of taxes.

and then for future reference how do i fill it out so that they withold more for taxes. so i dont run into having to owe in 2021.

 

[Zoe]

i know i can change it anytime, im saying i just found out that my job i started in june did it wrong and now im freaking out about the possibility of owing a bunch of taxes.

and then for future reference how do i fill it out so that they withold more for taxes. so i dont run into having to owe in 2021.

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Withholding zero single should withhold more than zero married, so you should be fine. It's pretty common for married people to withhold single.

 

[Razgriz417]

i know i can change it anytime, im saying i just found out that my job i started in june did it wrong and now im freaking out about the possibility of owing a bunch of taxes.

and then for future reference how do i fill it out so that they withold more for taxes. so i dont run into having to owe in 2021.

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you can withhold 0 but if that isn't enough taxes there should be a line to take more taxes out. I had a coworker who claimed exempt in the first 1/2 of 2018 and then paid extra taxes in the 2nd half of the year to make up for it. I personally wouldn't recommend that lol

In the new form, I think that's 4(c)

 

[Lee Chaolan]

So do we have to redo the W4 whenever this rolls out? I just checked my company's W4 and it's still the old version.

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You can re-do it if you have more income to claim or want to change your exemptions. Not everyone needs to fill out this new W4, simply because the form is changing.

 

[Clay]

I just thought, based on your description, it sounded like his reaction was more ego-driven than from ignorance, but it's not like I know him at all like you do. Sorry if I offended you; that was definitely not my intent.

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Not at all! Just wanted to clarify, he for sure completely believed that that's how taxes work, and at least a few other people at the table did as well.

I don't think I've ever had another conversation about it in-person, but like canseesea says below I think this is actually a fairly common belief.

I'd be shocked if this belief isn't held by a majority or near majority of people. It's a common fear I've heard about raises and even overtime pay. People are largely clueless about taxes, they just know they like to complain about taxes.

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You'd think the government would do a better job of explaining stuff like this. Include some simple explanations in tax documents or something. Maybe they do and no one pays attention. You'd think it would be important enough that most people would want to research it on their own, but I guess not.

 

[Complicated]

forms? what year is it? shouldn't the government already know how much you should pay and just send you the bill, giving you a chance to fight it if you thinks is wrong of course

Click to shrink...

Like everything else in America we have corporations that lobby to make paying taxes complex enough that they can charge money to do them for people rather than letting the government do it.