In 2020, the IRS released a new W-4 that was designed to make it easier for individuals to determine the amount that would be withheld from their paychecks.
However, the new form doesn’t contain a section for allowances and the tax tables changed. As a result, many individuals, if they hadn’t reviewed their withholdings and completed a new W-4, are now finding they owe additional tax.
Personal tax situations change from year to year. To avoid tax day surprises, employers should encourage employees to review their withholdings annually. Be advised that specific tax questions should be directed to the employee’s accountant.