IRS CALCULATION TOOL UPDATE REFLECTING THE

A married taxpayer filing a joint return may not be claimed as a dependent unless they are filing only to claim a refund of taxes paid and should usually select No here.The Income Tax Withholding Assistant is designed to work with 2020 Forms W-4 and those Forms W-4 submitted before 2020. Most people under the age of 19 and most students under the age of 24 who live with their parents or other relatives are dependents and should select Yes here. You can sign up for a payment plan on the IRS website.2021. The tool was created based on feedback from the business community that small employers require assistance as they transition to the new 2020 Form W-4.Use this free tax return calculator to estimate how much youll owe in federal taxes, using your.

Irs Calculation Tool Update Reflecting The

The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. Kenneth Hausser ( Debera Salam ( Kristie Lowery ( Payroll News FlashThe information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The IRS also made one minor editorial clarification on line 4 of that worksheet, changing 'from Schedule 1' to 'from Part II of Schedule 1.'Although the revised Form W-4 became available on December 31, 2019, the IRS says that employers may still use copies of the form printed or downloaded before December 31, 2019, noting that those forms will have the wrong 10% percentage shown.The new Income Tax Withholding Assistant is not only a great tool for small businesses grappling to understand the new Form W-4, but also a tool that large employers can use to test and review their automated payroll systems.Employers should be certain that the 2020 Form W-4 available to employees includes the latest update reflecting the change in the medical deduction floor percentage to 7.5%.For additional information concerning this Alert, please contact:Workforce Tax Services - Employment Tax Advisory Services Use your best estimates for the year ahead to determine how to complete Form W-4 so you don't have too much or too little federal income tax withheld.The Income Tax Withholding Assistant can be downloaded here.Form W-4 revised to reflect change in medical expense deductionThe IRS announced that due to the change in the medical deduction expense floor percentage from 10% to 7.5% effective in 2020, it was necessary to update the percentage on line 1 of the Step 4(b)- Deductions Worksheet on page 3 of the 2020 Form W-4 to 7.5%.