How to fill out the IRS Form W4 2020


In this video, I’m gonna go through the
IRS form w-4 for 2020 now this is a brand new walkthrough and if you have
this paper version where it says w-4 and 2020 at the top then this video is for
you. Now if you need an updated version of the w-4 I’m gonna leave a
link in the description at the bottom and I’m also going to go through a
secret tip to make sure that your IRS Form w-4 for 2020 is as accurate as
possible but before we do if this is your first time at our channel or you
haven’t subscribed click on the subscribe button at the bottom. My name is Travis Sickle CERTIFIED FINANCIAL PLANNER, helping you reach your financial goals. To make this video a little bit easier to follow I’m gonna leave in the
description at the bottom the different times of each section so you can just go
ahead and go right to the section if you have a question and you can skip to the
end to see that special tip to see how you can fill out the IRS Form w-4 as
fast as possible so I’m gonna go ahead and pull it up on the screen
so you can follow along if you haven’t already printed it go ahead to the
description at the bottom I’m also gonna leave a link for a fresh copy of the IRS
Form w-4 in case you made a mistake or in case you need to print one out now
here is the IRS Form w-4 for 2020 I’m gonna go through this as fast as
possible but if you have questions along the way go ahead and leave them in the
comments below and I’ll try to answer them and I’ll also do a few variations
in other videos so if you want to see a variation or something unique to your
particular situation just let me know in the comments down below and I’ll see if
I can go through it in future videos so starting with the very top of the IRS
Form w-4 for 2020 look at step 1 it’s all your basic information I’m gonna
highlight it really quick so you can see exactly what you need to fill out so
that’s just your basic information from your first name to your last name to
your social security number to your address your city or town state and zip code
just go ahead and fill out that basic information quickly and we can move to
the next section so just go ahead and fill out that top section with your
basic information so now that you have that basic
information filled out the next section is to fill out your filing status so if
you’re single or married filing separately check off the first box
married filing jointly that second box or qualifying widow or widower and the
third box for a head of household so that’s these three boxes right here so I
just go ahead and put an X on one of those boxes for this walkthrough I’ll
just go ahead and check off single now the directions for the next section are
right there complete steps two through four only if they apply to you otherwise
just go ahead and skip to step five so step two only gets filled out if you
have multiple jobs or you and your spouse work so what you have here is
complete this step if you one hold more than one job at a time or two married
filing jointly and your spouse also works so that means you would have two
jobs in the household and the correct amount of the withholdings depends on
income earned from all of these jobs so if you’re married filing jointly and you
and your spouse have a job then you have to fill out step two to get it is
accurate as possible so do only one of the following if we’re looking at a B
and C so it says only do one of the following now the first one is use the
estimator at www.IRS.gov/w4app for the most accurate withholdings for
this step now the common theme throughout the paper version is it makes
a reference to this URL seven times so it really wants you to fill out the IRS
Form w-4 for 2020 online now it’s not going to capture any of your information
online it’s just gonna make all the calculations for you and tell you
exactly how to fill out the IRS form w-4 which we’ll touch on in a few minutes
but if we look at B it says use the multiple jobs worksheet on page three
and enter the results in steps of four C or you can go to see if there are only
two jobs total you may check this box this box right here do the same on the
w-4 for the other job now this option is accurate
jobs with similar pay so I’m gonna highlight that and then otherwise more
tax than necessary will be withheld so really what it’s saying is it’s not
going to be as accurate if you just use the paper version and it is really
important from this tip down below that you resubmit w-4 to each one of your
jobs to make sure that there is accurate as possible but that’s probably why
you’re watching this video anyways because you want to make sure this is
accurate as possible but if you’re filling it out because you just got a
new job and your spouse has had a job go ahead and encourage your spouse to also
fill out a new form w-4 for 2020 to make sure that it’s as accurate as possible
now let’s take a minute and go write it back up to this section where it says
complete steps two through four only if they apply to you so if you don’t have
multiple jobs and you don’t have a working spouse and you have a job too
and you’re going to skip skip step two then step three is claim dependents so
if you don’t have any dependent children or other dependents then you’re gonna
skip step three and jumping to step four the same thing if you don’t have other
income which includes interest dividends and retirement income to name a few
then you’re gonna skip this section if you don’t have any other deductions that
are going to be higher than your standard deduction then you’re gonna
skip section B and you’re also gonna skip section C if you don’t need any
additional withholdings and really that is it if
you’re filing single or married filing jointly with just one job then it’s
gonna be straightforward and you’re just gonna go ahead and sign on the very
bottom right here employee signature and then you’re gonna put the date now the
neat thing about the IRS Form w-4 for 2020 is the fact that it doesn’t make
you do a whole lot of math especially the walk through that we just went
through there was no math involved or any calculations all you had to fill out
with step one and step five that’s it and on this W-4 the
“employers only” is going to fill out their own information so you even have
to fill that out anymore it just give it to your employer and that is it this
one-page that’s all you need to fill out now going back to step two if you have
multiple jobs or a spouse that works and you also have a job and you’re filling
out two w-4 then it says you have to either use the online estimator or
use the worksheet now the online estimator is going to be a lot more
accurate and it’s what’s recommended by the IRS but if you still want to use the
worksheet you can so here’s what the worksheet is gonna look like and you can
see I highlighted a few areas just to speed up the process so you can see
enter the results of the w-4 for the highest paying job so you want to use
the highest paying job when you’re going through this worksheet because the
answers on here or the additional withholdings should be put on the
highest paying job to be as accurate as possible and again you can see here it
says you can also use the online estimator at irs.gov
they’re strongly hinting that you should use the online estimator but I’m still
going to go through a walkthrough to show you what the paper version looks
like so if you do have two jobs it’s pretty simple to look at the two jobs
worksheet which is this page four of the IRS Form w-4 for 2020 now if we look at
an example of somebody who’s married filing jointly what you’re going to look
at is the highest paying jobs annual taxable wage and salary so we’re going
to take a look here and let’s say that one of the spouses makes between 80 and
90 thousand so let’s say they make eighty-five thousand that’s right
between this range eighty to ninety nine thousand nine hundred and ninety nine so
it’s right in there eighty five thousand if we follow it along to the lowing – if
we follow it along to the lower paying jobs annual taxable wages salary you’re
just going to go ahead and go across until you match it up with the second
job so let’s say that second job was 45 thousand that means the number that
we’re going to want to put on the IRS Form w-4 is worksheet is right there if
I can highlight it at $7,420 so
that’s how that reads so your look down this column for the highest paying job
and let’s say it’s $260,000 you can go across and if it was
$65,000 you’d be right here at $11,590 so
whatever the two jobs that you have are that’s where you would match it up to
figure out what information you want to put on that form so the example we’re
going to put $7,420 so now we can jump down past step two
because that’s three jobs to step three which is enter the number of pay periods
per year for the highest paying job so let’s say that we’re getting paid twice
a month so that’s 24 pay periods per year so I’m gonna put 24 right here if
we divide the annual amount on line 1 or line 2 C so in this case it’s line 1 by
the number of pay periods on line 3 this is the amount here so we’re gonna enter
in that amount by doing some simple math so we’re gonna take the $7,420 dollars and
we’re going to divide that by 24 that’s going to be $309.16 so $309 so 309 is what we could enter on line 4 and from
the directions it says put it into step 4 C so we’re gonna go back to that first
page and we can enter $309 one for C and that’s going to be the extra
withholdings so we can enter the $309 right there on line four C and that’s
going to be for the extra withholdings so it’s gonna do the calculation for the
withholdings and in addition to that it’s gonna put $309 and remember this is
the w-4 for the higher income earner now step three has to deal with claiming
dependents so you can see the income thresholds or the phase-outs for a
somebody that single is two hundred thousand and four hundred is married
filing jointly and that directly relates to the phase-out for this credit now for
each child it’s two thousand dollars but it’s really important to make sure that
you get this correct because it is under the age seventeen so it says under age
seventeen so it’s 16 and younger so if your child is 17 they’re no longer a
qualifying child for this particular tax credit what it is they would fall under
the dependents at $500 so let’s say that you had two kids that were under the age
of 17 so 16 and younger that would be $4,000 and let’s say you had a dependent
parent that was living with you that you were
taking care because they’re depending on you then that would be $500
so that total would be $4,500 and then it’s all you need to fill out right
there so you simply just multiply the two thousand by the amount of qualifying
children or the dependents by five hundred and then put those numbers here
and here and then add those up and put it right on section three now step four
with the included interest dividends and retirement income or any other sources
of income that you have that don’t already have withholdings you could put
the total dollars that you want that calculation based on right in Section
four so if it was $5,000 let’s say you got five thousand in dividends then you
can put five thousand right on for a and for B for the deductions we can use the
worksheet on page three so it’s that same page we had before but it was at
the bottom section which is step four B deductions worksheet now the deductions
that are talking about are not the retirement accounts they’re actually
listing them out right here so it’s enter your estimated for 2020 itemized
deductions so it’s above and beyond the standard deduction which are right here
the standard deductions for married filing jointly went up this year for
$24,800 and head of household at $18,650 and for singles it’s
at $12,400 of 2019 but we can go ahead and enter an estimate of your
2020 itemized deductions such as the deductions that may include qualifying
home mortgage interest charitable contributions state and local taxes up
to ten thousand dollars and medical expenses in excess of 10% of
your income now you might not know all of this information especially the
medical expenses in excess of ten percent of your income but you can use
an estimate or you can use last year’s numbers to kind of give you an idea of
where that would be now the idea here is if this total of the itemized is gonna
have to be higher than the standard deduction it for you to want and be able
to actually take the itemized deduction so again it has to be higher than these
numbers so if you don’t think you’re gonna have higher than twelve thousand
four hundred in these itemized deductions then you can go ahead and
skip this section but if you do then go ahead and fill
it out and add it up to make sure that it is higher because that will be what
you’ll take the itemized deductions instead of the standard deductions so
for example if line one was $5,000 and we were single at
$12,400 we put $12,400 here and
what it’s saying is if line 1 is greater than line 2 subtract it otherwise enter
zero so we’re going to go ahead and enter zero because line 2 is greater
than line 1 so line four enter an estimate of your student loan interest
deductible IRA contributions and certain other adjustments so this is from
schedule one or you can see this publication 505 for more information so
if we look at your student loan interest your deductible IRA and the reason they
put the deductible IRA contributions here is because your employer doesn’t
know how much you’re making in IRA deductions but they do know how much
you’re making on 401k or other retirement planning contributions so
they can do that math based on that information they just want to know what
other sources of deductions that you have to make sure it’s as accurate as
possible so line 5 is add lines 3 & 4 enter the results here and step 4 B of
Form w-4 so for B so let’s say we were adding another $5,000 to our traditional
IRA so then we would add lines 3 & 4 3 would be 0 and this would be $5,000 so
we’d put $5,000 right there on line 5 and then we’re going to put that in step 4
B so go back to 4b and we can enter our $5,000 because we’re making that
contribution into a traditional IRA that is a deductible IRA ok so that was the
paper version going through the IRS Form w-4 for 2020 and here is the secret
method to filling out the IRS Form w-4 as fast as possible and as accurate as
possible I’m gonna go ahead and pull it up on the screen to help you follow
along with me so we go to google and you can type it in IRS Form w-4 we’ll go
ahead and click on that and you can see it comes right up there
IRS Form w-4 at the top we could scroll down
and click on the IRS tax withholding estimator here is the secret to making
sure this is as accurate as possible go ahead and click on that link right there
that blue button now this is gonna look a lot like last year’s but it’s going to
get even better so follow along with me and I’m gonna show you exactly how to
make sure this is as accurate as possible and as fast as possible so I’m
gonna zip through this and this walkthrough so you can follow along so
we’re gonna check off single and then can someone else claiming it as a
dependent on their tax return we’re gonna say no dependents we’re gonna say
no now if you do have dependents go ahead and check them off I’m just gonna
zip through this walkthrough and then other walkthroughs I’ll go into the
dependents and other information in this online estimator now go down to income
you have to have an income to fill this out because that’s what it is for so
we’ll say we have one job and we have no pension income so we have none of these
other sources of income and the buddy just go ahead and click on next
now the next section is going to be your income and withholdings so we’re gonna
say yes we do have this job in an entire year from January 1st through December
31st if you didn’t go ahead and check off no and then just put the dates that
you started the job and if you expect to hold that job through 12 31 of this year
then just go ahead and put 12 31 of 2020 right in there and it will it will do
the math and the calculations for you based on that information and if you do
change jobs throughout the course of the year or you anticipate changing a job
just go ahead and put 1231 so we can do the math for you and as you get a new
job then you can make those adjustments on future W floors when you’re filling
in that out so let’s go ahead and put how frequently we get paid we’re just
going to put twice a month and we’ll put a date of January 1st 2020 and we’re
gonna click on next nope didn’t like that so you have to put
the actual zeros in there so it’s a little picky and that should work okay
now populates the next box how much do we expect to make this is an estimate if
you’re getting commissions or bonuses like that it’s going to also ask you
that information but you have to put the S
so let’s say we make $50,000 a year and and right there you can see the bonuses
so we’re gonna put zero I’m gonna assume that we’re gonna get zero in this
example if you have bonuses you can go ahead and estimate that now if you don’t
know what your bonuses are give it an estimate and if you have no estimate at
all then just skip it move to the next section and as you earn more money you
can go ahead and make those adjustments on the IRS Form w-4 so the expected to
receive later this year we’re gonna go ahead and put zero again and then here
from your last pay stub now if you didn’t get anything from your last pay
stub because it’s so early in the year then you’re just gonna put nothing there
but if you’ve already received a paycheck go ahead and look at your last
pay stub so we can help make that adjustment and as we move throughout the
course of the year this is going to get more and more important to make sure you
go to your last pay stub and pull this information off of it don’t just grab it
any pay stub make sure it’s your most recent one because it’s going to have
the most accurate information possible so I’m going to go ahead and just plug
in numbers here and I’m gonna say five hundred dollars now yours can be
completely different especially because I put January first if you’re close to
the beginning of the year your information is going to be way different
so look at your last pay stub to make sure it is accurate as possible so let’s
say from our last pay stub it was a hundred dollars do we have a 401 K if
you do go ahead and check that off because that’s gonna reduce your overall
tax liability your overall taxable income huge benefit so if you’re not
already saving consider saving into your 401 K because it’s gonna save you a
bunch of money on taxes and obviously boost your retirement savings now the
next section is just like the 401 K where it’s pre-tax dollars so if you
have an HSA FSA or pre-tax childcare credits then go ahead and plug those in
because it’s going to reduce your total taxable income reduce your tax liability
we’re gonna say no for this example and then we’re gonna go to the adjustments
section and we’re not gonna do any adjustments I’m gonna go to the next
step we’re keeping this super simple now the deductions from income I’m gonna
take the standard deduction for most people it’s going to be the standard
deduction but if you have itemized deductions that are going to be higher
than your standard deduction then that’s what you’re going to go with if you’re
uncertain then go ahead and go through the worksheets to add it all up and if
the number is higher than your standard deductions then you’ll take the itemized
we’re gonna take the standard deduction in this case which you could see right
there because we checked it off on the first screen that we were filing single
I’ll zoom in so you can see it it’s the standard deduction of twelve thousand
four hundred dollars go to the next section for tax credits if you want to
see the tax credits you can get a list there and if you have a question about
one of these credits whether or not you qualify go ahead and do a little bit of
research read about it and see if you qualify or see if you can take advantage
of the credit now why I say it take advantage of the credit because if you
look at that retirement savings credit that’s the savers credit where you can
take action by saving for your retirement account and possibly reduce
your overall tax liability as well so take a look at these credits to see if
you qualify but for this walkthrough I’m just going
to go ahead and zip on and we’re gonna skip the credit section to see the
results so here’s the results page so you can see right here it says the
expected tax withholdings is 2800 and the anticipated tax obligation is 4318
meaning that we’re gonna have an underpayment
of one thousand five hundred and eighteen dollars but the good news is we
can make that adjustment to make sure it is as accurate as possible so if we
scroll down there’s actually a new bar here that you can slide across if you
want to increase your withholdings so you can get more in a refund at the end
of the year but if you scroll down you can see this section here and here is
the best way to fill out the IRS Form w-4 for 20/20 and you’re gonna see it
right here it’s gonna tell you that we need to enter 259 for credits and other
reductions to annual holdings so it’s making it an adjustment based on the
information that we put into the estimator and this is why it’s so
accurate because it can figure out exactly how much we need to withhold as
fast as possible so we just go ahead and click on that little link download
prefilled form w-4 you’re all set print this out or put in this number right
here you’re putting the 259 right in Section 3 for us
if we had the pendants as well it would also add that to it but it’s making that
adjustment so it’s as accurate as possible it might not have been this
accurate if you didn’t use the online estimator and just stuck to the paper
version so you might get a bigger refund at the end of the year or you might have
to owe money. so either or because it wasn’t as
accurate so using that online estimator is super
valuable so if you go through it it can tell you exactly how to fill it out then
all you need to do is either print it out or fill out the one you currently
have and give it to your employer and that is how you fill out the IRS form
w-4 for 2020 now if you look question or you want to see a different variation
don’t fret just go ahead and put it in the comments down below and I will try
my best to answer it as fast as possible I’ve done a ton of other w-4 videos in
the past and I’ll continuously do more into the future so if you do have a
question just go ahead and put it in the comments down below and we’ll see if we
can’t get that answered if you’ve enjoyed this video be sure to subscribe
and leave your comments down at the bottom

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