June 1 (UPI) — The Internal Revenue Service released a draft copy of its new W-4 form Friday, saying it’s meant to keep withholdings closer to what Americans owe under the 2017 tax law.
The new form, which is not yet officially released and may change, will be required for new employees starting in 2020. The IRS said the form should more closely match employees’ withholdings to what they owe in income taxes each year.
“The new design reduces the form’s complexity and increases the transparency and accuracy of the withholding system,” the IRS said.
The first year under the new GOP tax law, a NerdWallet analysis found that 20 percent of Americans ended up owing earlier. Of those taxpayers, 32 percent received a refund the year before. That amounts to 7.9 million new Americans owing money this year.
The new tax code eliminated personal exemptions and slashed the mortgage tax deduction. And experts say too many people didn’t change their withholding — the amount of tax deducted from each paycheck — to compensate for the changes. The NerdWallet survey found 17 percent of taxpayers did so after the new law went into effect.