November 22, 2020

W-4 2020 Explained

W-4 2020 Explained well hello everyone it's great to seeyou my name is Mike the CPA welcome to money in life TV! on this channel we'reall about helping you. Learn finances investing taxes and more and boy do wehave a tax video for you today as promised as promised I told you guysfollowing the new w-4 there was some, major changes coming in the last videoso I've been watching the IRS website like a hawk like a, damn hawk waiting forthis new draft form to finally come out and it finally did, so what we're gonnado in this video is we're gonna look at this draft form what it's looking likehow. It might impact you now if you want to support the channel just do me a hugefavor and drop a. Like especially if you enjoy it enjoy the information andplease share this information with your friends because a lot of people don'tknow about these upcoming changes especially when it comes to, taxes soplease share this with others I would really appreciate it, after seeing thisnew draft form I realize it actually isn't as bad as I was originallythinking knowing what I know now I. Think I over exaggerated a little bit in thelast video not not intentionally of course but Ithink I was overly pessimistic about the information, but now that I see it it'sreally if there's there's definitely some major changes but it's not as badas. I originally thought so let's let's cover it now. This is on the IRS websiteyou can go to the IRS draft forms and inserts w-4 and that's where you'regonna find this information now. Believe it or not the IRS actually met theirdeadline in fact they they said it was gonna come.

Out on May 31st and it cameout on May 30th good job IRS good job so this is if youopen it up on the way on their website which you can see the.

Link up here theaddress. You can find this and if you have any comments to leave with acommissioner about the form that you're gonna look at if you have anysuggestions obviously you're probably. Thinking well this is where I can emailthe person to tell them to go to hell I'm sure, they get plenty of commentslike that but if you want to email them on anything specifically about the formthen this, is where you would do that and you would provide your input there theyanticipate there could be a few more changes to this thing so don't this isnot the final draft, because it sounds like they mightrelease a new one in. Summer if you read this it says somewhere in here it, sayswe're in oh yeah we will post a new draft this summer so we'll see how thatchanges and if there's any significant changes to, this draft I'll make a videoon it so that you guys can stay up to date on this. Topic okay so here's whatthe form looks like let's go down here and take a look this is probably gonnacome out if I were to guess probably in January. Of next year maybe February ofnext year I'm. Not sure yet not sure but this is what it looks like so a lot ofit's the same and a lot in I would, say about half of its the same as the oldone and about half of its different you know from a quick glance so obviously uphere just like your normal w-4 you're gonna you're gonna. Put your name youraddress information your filing status if you're single married head ofhousehold married filing, jointly whatever it may be it vince has completesteps two through four if they apply to you otherwise skip to step five. Seeinstructions on page two so in this, video since it's just a draft I'm notgonna worry about filling this out I don't think it warrants us looking atthat at this point until it's all done once it's all done, then I can make itvideo specifically helping you show you how to fill this stuff out but untilthat. Point we're just gonna take a quick look at. This so because it in theinstructions we're gonna look at it's gonna cover if you have more than. Onejob so whether so maybe you have two different jobs maybe your spouse has ajob so maybe that's three jobs or you know whatever it may. Be but it talksabout that more in detail in the instructions but here is the meat andpotatoes of of this. Form is is right in inline three through five is the meatand potatoes of this new draft form so this first. Part I I like this first parton line three it's really dealing with the child tax credit so. It says if yourincome will be two hundred grand or less four hundred thousand or less, if marriedfiling jointly then you're gonna be putting here whether or not you canclaim the child tax credit so if you remember and, I have a video that laysout the specific rules of the child tax credit that if your child is under theage of 17 you can get up to a $2,000 credit per childwhich. Is huge it's a huge tax savings which is great and if you have somebodya child who's over. The age of 17 well you can still get up to a $500 taxcredit if they're between the ages of 18 and 23. If there are full-time studentsso there's that so you would enter that information here, as it would say andthen the big issue that that I was uncertain about based on what I wasreading in the public just like, news coming out about these new. W-4 changesis they were I heard the IRS was going to be actively wanting people to listout their other forms of income for on their w-4 which is you.

Know reallyviolates a lot of privacy issues because if you have other income from, interestdividends or you know if it's significant or if you have income fromself-employment then you know that gets a little that gets a little dicey withyour caning over this information. To your employer do you what would youreally want your employer to see that you have other forms of. Income becauselike I said in my last video they're gonna look at that and they're they'reprobably. It would nerf any salary increase you would get if. They see ofall these other forms of income it'll say oh you're not hurting that bad so onfor a it says if. You have other income if you want tax withheld from otherincome you expect this year that will not have withholding that will not havewithholding remember your wages, unless you're exempts are required to have taxwithholdings on it but interest dividends capital gains from stock sellsretirement income you know pension income or income fromself-employment. Then that normally you're not forced to withhold on thatyou still have to pay taxes on that income, but you're not really required towithhold money on that unless you choose to do so as this says right here it saysother forms of income. This may include interest dividends retirement.

Income.

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