The final draft of the updated 2020 Form W-4 is slated to grace HR desks all over the US in November. Considering the Tax Cuts and Job Acts, it would make sense to have a new form. I understand that, but why does the IRS have to go and make it so complicated?
The IRS intimates that this is a new, gentler, Form W-4. According to IRS.gov, the 2020 W-4’s “new design reduces the form’s complexity and increase the transparency and accuracy of the withholding system.” I see. In that case, I personally just don’t understand what a “reduction in complexity” means.
For example, merely comparing the first page of the 2019 form to the 2020 form seems to contradict the IRS’ claim. The 2020 form has been described as “a mini-tax return” by Melanie Lauridsen, speaking to The Detroit Free Press. She’s got a point. Perhaps I’m just used to the old, quarter of a page design, but I don’t think that’s the only thing that’s going to be upsetting taxpayers.
On the first page of the 2020 Form, Step 4(a) invites one to enter the amount of other income. Again, as Ms. Lauridsen notes, “You wouldn’t want your employer to know [you’ve] got millions in [your] bank account. I could almost understand if Step 4(a) was sandwiched somewhere between the deductions worksheet and the annual taxable wage and salary table, but nope, it’s not. Smack dab in the center of the very first page, that’s where you’ll find it.
While it’s very nice that the standard deduction has now gone up to $12,000 and it’s also very nice that the Child Tax Credit has been elevated to $2,000, but did the IRS really need a “mini-tax return” to reflect these changes? I also wonder what kind of time, energy, money and psychological feng shui this new design consumed. Surely there was a better use of all of these commodities.
Unfortunately, Bourke Accounting can’t bring back the familiar and understandable 2019 Form W-4. However, Bourke Accounting can help you make sense of this very interesting new document. So why not stop by and let Bourke Accounting guide you through the new rules that will affect your financial life?