
IRS to release new, more complex W-4 form this year - jermaustin1
https://www.usatoday.com/story/money/2019/04/09/tax-withholding-irs-release-new-more-complex-w-4-form-year/3401811002/
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tomohawk
Write your congress critter and have them delay implementing this until they
do it as a simple online calculator instead. The first users should be
congress critters and their staff.

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lotsofpulp
Already exists.

[https://apps.irs.gov/app/withholdingcalculator/](https://apps.irs.gov/app/withholdingcalculator/)

~~~
darkstar999
Someone at the IRS hasn't learned about the <label> tag.

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DickScarington
This is a privacy nightmare. I do not want to share my other sources of
income, mortgage deductions and other key financials with my employer.

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icedchai
So don't. Put it all down as zero.

~~~
darkstar999
Under penalties of perjury, I declare that I have examined this certificate
and, to the best of my knowledge and belief, it is true, correct, and
complete.

~~~
icedchai
I won't be worrying about it. I already pay estimated taxes to account for my
extra income.

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newsoul2019
Can't you just set it to zero and forget about it?

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cmurf
Unlikely. You sign the W-4 statement:

 _Under penalties of perjury, I declare that I have examined this certificate
and, to the best of my knowledge and belief, it is true, correct, and
complete._

Where you must have at least an allowance of 1, for yourself. And why would
you want fewer allowances? That results in more withholding, which is an
interest free loan to the government.

You can claim a withholding exemption only if last year's tax liability was
zero, and if you expect this year's tax liability will be zero.

~~~
darkstar999
There are no allowances on the new W4.

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zaroth
Is this the preview of the new W-4? Line 5...

[1] - [https://www.irs.gov/pub/irs-dft/fw4--
dft.pdf](https://www.irs.gov/pub/irs-dft/fw4--dft.pdf)

EDIT: Apparently not. Would have been nice if TFA could have shown up the
draft form?

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gok
"IRS to make it easier to calculate your correct withholding rate" would be a
more accurate headline

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toddh
The current w-4 is almost impossible. Taxes are way more complicated than last
year. There are more rates. More different kinds of income. It's almost a tax
return.

~~~
tvanantwerp
But there aren't more rates. There were 7 different Federal income tax
brackets in 2017[1], and there are 7 different brackets under the new law for
2018[2].

[1]([https://taxfoundation.org/2017-tax-
brackets/](https://taxfoundation.org/2017-tax-brackets/))
[2]([https://taxfoundation.org/2018-tax-
brackets/](https://taxfoundation.org/2018-tax-brackets/))

~~~
toddh
Sure, if all you have is a W-2 and no kids.

The rates referenced are only for ordinary income. But it's not just the
rates... it's the base. Most people do not understand that different types of
income are taxed very differently.

In addition to ordinary tax rates, there are 3 different capital gains rate
(0%, 15%, 20%), Then there's the 25% depreciation recapture rate and the 28%
collectibles rate. Then 3.8% Net Investment Income tax will be added to that,
but only the amount over the threshold not the full amount of your investment
income. Don't forget the capital loss limitation. How do you apply the rate if
you can't deduct more than $3K in a year regardless of how much you've lost?

Which brings me to passive income & how only passive losses can offset it....
and how you can't deduct the any passive losses if your AGI is > $150K....
unless you're a real estate professional. Oh but if you have passive rental
income, that could be subject to the 3.8% tax on top of your ordinary tax.

Even if you just have a W-2, you may also have to pay 0.9% Additional Medicare
Tax on certain wages...how much depends if you're married or not.

And even in you only have ordinary income, what you're really looking for an
effective tax rate. But to determine that, you have to take into account the
tax credits which you may or may not get depending on your AGI, & a host of
other factors. And then how much of your deductions will actually count
towards reducing your taxable income. High state tax folk are figuring that
out now.

Then there's the lovely 20% Qualified Business Income...which you might get,
or you might not. depending on what type of business you have and if you pay
wages. But if you have REIT or PTP dividends (read investors), you get that
deduction no matter what...which means that your actual rate on that income is
really 80% of the nominal rate referenced.

Hopefully you're getting my point: It's a myth that you can take "income" &
multiply it by the marginal rate in the table to calculate your actual tax
liability.

It's so much more complicated than that. ... Oh, and then tax reform sunsets
in 2026 & we're right back to the 2017 tax law more or less.

