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Accountant Explains 2020 W4 - YouTube
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welcome to the February 21st 2020
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payroll solutions community live Q&A
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today we are going to be talking about
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the new federal w-4 and what that means
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for your employees and possibly for
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yourself and I'm going to share my
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screen here so that we can see the w-4
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while we're talking about it I am just
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things are always on the way when you do
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a zoom screen share so I just moving
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things out of the way all right
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so the most important parts about this
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w-4 is step one where you fill in your
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name your social security number your
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address and your filing status and I
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think these are pretty self-explanatory
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the biggest change though is you used to
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have single married
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a head of household or and then you had
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married but withhold at the higher
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single rate so now they've combined the
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single and married filing separately
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we've got married filing jointly or
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qualified widower and had a household
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which is new what you can only file that
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if you are a head of a household meaning
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you are supplying 50% or more of the
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year living expenses for a qualifying
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individual and the other important
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section of the new w-4 is step 5
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where you sign it and date it and as
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always the employers only section where
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you put in the employers name address
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and data first employment and the
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employers ein is still pretty optional
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and then steps 2 or 3 or 4 you'll fill
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out only if they apply to you
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so basically step 2 applies to you if
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you work multiple jobs or if you're
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married and your spouse works step 3 is
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where you claim the dependents so if
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your income is $200,000 or less if
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you're single or four hundred thousand
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or less if you're married filing jointly
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you can you put two thousand dollars in
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here for all the number of children that
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you have under the age of seventeen and
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then you multiply the number of
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dependents by five hundred and get the
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total that you put in line three
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so step four you figure out your income
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your other income but not from a job the
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deductions or if you want to have extra
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withholding then you can put that number
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in 4c and there are a lot of
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instructions that go along with this I'm
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just skipping over
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I just abbreviated these this page of
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instructions and this is your worksheet
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for completing step two if you have
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multiple jobs and I'm not going to read
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every line here but just know that if
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you have two jobs you put or three jobs
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or more jobs you you fill all this out
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and it includes these fun tax tables
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which can be a little bit difficult to
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read but basically if this is your this
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column is for your annual taxable wages
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and salary and if you have another so
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this is for job one this is for job two
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and let's say that you have your higher
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paying job is 60,000 and your lesser
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paying job is sixty thousand six
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thousand five hundred and seventy
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dollars would be your tax liability if
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you are married filing joint and the tax
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tables are very similar they just have
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different numbers in them so say you're
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single your tax liability with the same
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60,000 in sixty thousand jobs would be
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7890 had a household with the same
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60,000 and sixty thousand
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it would be
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10200 so don't that's the tax table but
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and people are always going to their HR
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department or payroll processing company
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to say how do I feel there so what do I
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need to put and unfortunately the only
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qualified person that can answer this
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question for you is your tax preparer so
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what I've been doing for payroll
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solutions plus when clients come to us
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and ask how their employees should fill
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this out I always give them one to fill
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out and just if they if they need help
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they because the beautiful thing with
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w-4 is that you can still fill out as
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many as you need to during the year so
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just to get them on payroll I have them
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fill out step one and step five and I
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send them another one that is blank that
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they can take to their tax preparer and
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their tax preparer can help them fill
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out steps two three and four because
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they're the only ones that know the full
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tax liability of the full tax
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responsibility for
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any of your employees or poor you even
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yourself if you're in Oscorp
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and you want to know what how to fill
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this stuff out another place that people
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can go look to figure out how what their
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tax liability is supposed to be is
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irs.gov in slash individualist slash tax
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withholding estimator and I am going to
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throw this link in
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the Facebook
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live and I am not seeing it so I will
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throw this on as soon as I get done
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oh here we go it was just on my other
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screen alright so there's the link to
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the tax withholding estimator so you
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basically gather up all of your tax
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information like your pay stubs your so
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fill out your filing the status so I
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would be married filing jointly can
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someone else claim me as a dependent on
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their tax return
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no do I plan to claim dependents on my
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tax return and since my all of our kids
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are old enough and they're out of the
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house I will say no do you or will you
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or your spouse hold a job this year with
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paychecks which federal income tax is
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regularly withheld and my husband still
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has a full-time job so we will say yes
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how many jobs do you expect to hold this
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year so me I expect to hold zero jobs
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because I had my own business and how
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many dramas is your spouse expect to
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hold this year which will be one will we
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be receiving a pension no and depending
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on
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[Music]
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how you answer the questions it brings
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up different options so if you have
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dependents you can pick how many
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dependents you have so let's just say
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you've got four kids you see you have
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four dependents and then if it pops up
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and the beautiful thing is you can play
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with different scenarios and you're not
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going to lose the information that
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you've already put in I'm I'm not gonna
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completely fill all of this out but oh I
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guess we're are in step five of five
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will receive income from self-employment
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let's see all right so we've got we're
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on the next part where we're putting in
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our sources of income which would be in
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my case my spouse's job and my
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self-employment and know let's just
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throw some numbers in here every two
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weeks let's say that today is payday I
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really don't know when he gets paid but
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we'll go with today and the total wages
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that they expect to receive this year
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let's just we've been using 60,000 so
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let's just throw in 60,000 even though
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that is not accurate so we have not
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missed the beginning of the year so no
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bonuses but let's just say there's a
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2,000 dollar bonus at Christmas time and
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that the employers gonna withhold
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appropriate taxes from bonuses
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all right which this year the
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appropriate bonus tax withheld is 22%
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federal withholding
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Oh see and now I'm not gonna be able to
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answer this because I don't know what
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these answers are but let's just say
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1500 has been withheld so far and the
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amount on the last check let's see
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just to make the math simple
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let's say 1200 and the amount withheld
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on the last check was 300 because we're
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about 4 paychecks into the year so far
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and we'll just say no no self-employment
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income let's just say 80,000 because
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we're making up numbers
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and I have not paid in any federal
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income tax let's just go to the next
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step we'll do the standard deduction and
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you'll obviously fill this in with you
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and well we're not doing ok so according
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to this at the the way that things are
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going right now the expected under
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payment is thirteen thousand nine
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hundred and thirteen so this is a really
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good way to you know and obviously the
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these are all estimated numbers but
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it'll give you a really good is a good
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place to start and figure out how you're
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gonna fill out your w-4 especially if
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you if you're self-employed and your
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spouse isn't then you can you know in
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this case we would want to have at least
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another that was in dollars of federal
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income tax withheld
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from from my spouse's paycheck every
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month so that would equate to about four
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hundred and seventy five dollars per
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paycheck so let's see I am going to stop
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sharing my screen now and I'm gonna take
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a peek at the Facebook and see if
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anybody has any questions on what we
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what I've just shown and I am not seeing
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any yet but if you are watching this on
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the replay please make sure you if you
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have questions please make sure you put
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those in
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in the comment section below and thank
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you all for watching
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