The IRS made wholesale changes to the W-4 in 2020. The form was changed to allow more accurate withholdings due to the changes in the tax code related to the Tax Cut And Jobs Act passed in 2017. This legislation eliminated personal exemptions, increased the standard deduction, and made the child credit available to more people. Because employers and employees were not required to fill out new W-4s and the perceived complexity of the new process, most employees did not complete a new W-4. This…
Tag: Taxes
Inflation Adjustments By The IRS May Mean Less Taxes For Many Americans
Filers whose salaries have not kept pace with inflation could see savings on their federal income tax bills. The rapidly rising cost of food, energy, and other daily staples could allow many Americans to reduce their tax bills next year. Tax rates are adjusted for inflation, which typically means incremental movements in the thresholds for what income is taxed at what rate. But after a year that brought America’s fastest price growth in four decades, the shift in rates is far more notable: an …
