Filling out Form W-4

What Does the New W-4 Mean for My Small Business?

The Tax Cuts and Jobs Act has changed a lot of things about taxes, including increasing the standard deduction, eliminating personal exemptions, and trimming income tax rates. To help navigate all these changes, the IRS released a new W-4 and withholding calculator at the end of February.

Download the New W-4

Although the IRS revised the tax tables to still work with a 2017 W-4, you should encourage your employees to check out the new withholding calculator to determine if they need a new W-4.

Go to the New Withholding Calculator

The IRS specifically urges people to doublecheck their withholding if they

    • have more than one earner in the family;
    • have two or more jobs at the same time or only work part of the year;
    • have children and claim tax credits, like the Child Tax Credit;
    • have older children, including children 17 years old or older;
    • itemized their deductions in 2017; or
    • have high incomes and more complex tax returns.

How Can the New Withholding Calculator Help My Employees?

If an employee decides they need to update their W-4 and want to use the calculator (to make their life easier), they need their last paystub and their completed 2017 tax return. After they’ve filled out all the information, the withholding calculator will tell them exactly how to fill out the new W-4.

The calculator aims to help people withhold the exact right amount. If they withhold too much, they’ll get a large refund. If they don’t withhold enough, they’ll owe the government and may even face penalties.

Your employees know that they fill out a new W-4 anytime they start a new job, but remind them that they can fill out a W-4 anytime their situation changes. Your employees should review their W-4 if they get a raise, their spouse gets a new job, they get married or divorced, they have a child, or, in this case, if the tax law changes.