How can I avoid owing taxes at the end of the year?
When does this new W-4 form release? Asking because I am currently unemployed, and should I expect this form upon getting employed again?
I want more money in my paycheck, I am currently in a state with no state tax, but I also do not want to owe at end of year.
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Hello WOlmeda,
Thank you for your question. I am happy to assist you.
The new Form W4 was changed due to the Tax Cuts and Jobs Act (TCJA) which became law in late 2017. Due to this change, the new Form W4 does not require you to complete the number of allowances you would like to claim like you had to with the previous form. Hence, you don’t have to input 0, 1, 2 or 3 on the new form.
The new form has three main sections that you have to complete to determine your withholding and you complete the section that applies to your situation. There are 4 steps for you to complete:
https://www.irs.gov/pub/irs-pdf/fw4.pdf
When you become employed again in the near future, you would have to complete the new Form W4 and submit it to your employer.
To avoid paying taxes, you would have to have a higher federal tax withholding taken out of your paycheck so the taxes you owe will be lower than the total tax payments that you have made throughout the year.
Finding the right balance with the right amount of take home pay and not owing any taxes when you file your tax return can be a little bit tricky. It is a trial and error process.
In order to more accurately estimate how much withholding should be taken out of your paycheck, you can utilize the following Form W4 calculator:
https://turbotax.intuit.com/tax-tools/calculators/w4/
Please let me know if this answers your questions, or if I can be of further assistance.
Thank you!
Shirleyh88
Hello WOlmeda,
Thank you for your question. I am happy to assist you.
The new Form W4 was changed due to the Tax Cuts and Jobs Act (TCJA) which became law in late 2017. Due to this change, the new Form W4 does not require you to complete the number of allowances you would like to claim like you had to with the previous form. Hence, you don’t have to input 0, 1, 2 or 3 on the new form.
The new form has three main sections that you have to complete to determine your withholding and you complete the section that applies to your situation. There are 4 steps for you to complete:
https://www.irs.gov/pub/irs-pdf/fw4.pdf
When you become employed again in the near future, you would have to complete the new Form W4 and submit it to your employer.
To avoid paying taxes, you would have to have a higher federal tax withholding taken out of your paycheck so the taxes you owe will be lower than the total tax payments that you have made throughout the year.
Finding the right balance with the right amount of take home pay and not owing any taxes when you file your tax return can be a little bit tricky. It is a trial and error process.
In order to more accurately estimate how much withholding should be taken out of your paycheck, you can utilize the following Form W4 calculator:
https://turbotax.intuit.com/tax-tools/calculators/w4/
Please let me know if this answers your questions, or if I can be of further assistance.
Thank you!
Shirleyh88
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