We are just a couple of days away from the deadline to get your federal income tax return finished, signed and filed.
It's a chore for many of us. But you might just look back on these days as being easy compared to what's to come in 2020.
Yes, the Internal Revenue Service has a surprise waiting. The W-4 form—the one where you declare exemptions for yourself and dependents so your employer will know how much to withhold for taxes—is about to get a lot more complicated.
President Donald Trump's Tax Cuts and Jobs Act increased the standard deduction but eliminated personal exemptions, so the old W-4 questions don't apply anymore. And it seems the IRS would like to streamline the system so few people owe anything at the end of the year and few get refunds.
So instead of just deciding how many exemptions, the new Employee Withholding Allowance Certificate—that's what the W-4 is officially called—will likely ask questions not only about your filing status and dependents, but also wages or business income, interest and dividend income and earnings from all sources outside your job or profession, tax credits and information about itemized deductions. The form isn't finalized yet, but that seems to be what the agency is going for.
Our take: Well, making the tax system more efficient is a good thing. But it will likely be a royal pain for a lot of taxpayers.
Still, the plan is to roll the new W-4 out for the 2020 tax year. So you have time to get ahead of the game and gather the relevant information for the inevitable.
Or you could just wait until the last minute. Which is something a lot of Americans are used to doing when it comes to taxes.