The new tax law made it hard to know how much to withhold from your paycheck every few weeks. As a result, many people withheld less than they might otherwise have, and either received a smaller refund than expected or had to pay additional taxes in April.
Now the tax agency has released a proposed new updated Form W-4, which reflects the changes from the Tax Cuts and Jobs Act—including the doubling of the standard deduction, eliminating personal exemptions and limits on certain itemized deductions. You can find it here: https://www.irs.gov/pub/irs-dft/fw4--dft.pdf, and the plan is for everyone to use some version of this in 2020.
The current W-4 asks taxpayers to note the total amount of allowances they’re claiming (the more, the less tax withheld), and any additional amount they want taken from each paycheck. The new form will ask you to account for multiple jobs within your household, and to spell out the details of any other income that didn’t have taxes withheld, including interest, dividends and retirement income. An additional section asks taxpayers to claim their dependents, and to factor in the $2,000 child tax credit for those under 17, or the $500 credit for other qualifying dependents.
Retirees also need to reevaluate their withholding amounts. They can use Form W-4V to withhold a flat rate from their Social Security check or Form W-4P to withhold from their pension.
...