The New, More Precise W-4

Many taxpayers last year got an ugly surprise: Instead of the anticipated refund, they got hit with a tax bill.
After a 2017 tax law that cut taxes for many, the IRS reduced the amount of taxes needed to be withheld from paychecks. The outcome was that many taxpayers didn't have enough taxes taken out of their 2018 paychecks and ended up owing Uncle Sam.
Since then, the IRS has made some changes, including redesigning the W-4 form, that will allow employers to more accurately calculate income tax withholdings. Gone are the somewhat confusing "allowances" that workers used to claim on W-4s. Instead, the IRS says, the new W-4 replaces complicated worksheets with straightforward questions. (Find the new form here).
You don't have to fill out the new form — unless you're starting a new job this year. But you might want to anyway if your withholding seems out of whack. Ideally, your tax withholding should be as close as possible to your expected tax liability. This won't generate a huge refund, but it also means you won't overpay taxes during the year and that's more money in your paycheck.
If your tax life is simple — you have one job, don't file a joint return with a working spouse, don't itemize or claim dependents — filling the new W-4 will be simple, too. You fill out your name, address, Social Security and filing status; then sign and date the form. That's it.
If your tax life is more complex, it will take more time and information to fill out the new form. You'll need to provide, say, information about your dependents and spouse's income. Your employer will also need to know what tax credits and deductions you anticipate claiming.
You can check if you're having enough taxes withheld using the IRS's online Tax Withholding Estimator.
Please note: The contents of this publication provided by MissionSquare Retirement is general information regarding your retirement benefits. It is not intended to provide you with or substitute for specific legal, tax, or investment advice. You may want to consult with your legal, tax, or investment advisor to review your own personal situation. Some of the products, services, or funds detailed in this publication may not be available in your plan. This document may contain information obtained from outside sources and it may reference external websites. While we believe this information to be reliable, we cannot guarantee its complete accuracy. In addition, rules and laws can change frequently.