2019 W - 4 DELAYED

[Lee B]

I sure hope they can come up with something better than the first draft, which was way worse than the 2018 W -4 !

"The planned final release of a revamped 2019 Form W-4, Employee’s Withholding Allowance Certificate, could be delayed a year, a source familiar with the revision process the Treasury Department is applying told Bloomberg Tax on Sept. 6.

Members of the payroll and service-provider communities said in comments to the Treasury Department that failing to finalize the 2019 draft by midyear would severely hamper the ability of many employers to effectively adopt the changes of the new form in time for 2019.

A draft 2019 Form W-4 was released in June and a second draft was planned to be released in August, but there is no date for when a second draft would be available, Scott Mezistrano, IRS representative for industry stakeholder engagement and outreach, said Sept. 6 in a monthly payroll industry teleconference.

A release of the W-4 with its significant changes at this time of year likely means constrained time frames for design, programming, analysis, and the significant testing needed to ensure proper implementation, said Pete Isberg, president of the National Payroll Reporting Consortium."

[SaraEA]

Does that mean taxpayers won't have to calculate pretty much their entire 2019 tax return in JANUARY 2019?  They won't have to divulge to their employer how much their spouse earns, that they have a second job, what they think (hope) their year-end bonus will be?  There goes an entire source of income for us tax pros--filling out that W4 would take more time than completing a 1040, and maybe we'd even charge for the disclaimer we'd have to have signed that all of the numbers are guesses and the results may vary.  I did have a client come in with a W4 yesterday, but fortunately it was the old kind.  I just told her Single, Zero, and didn't charge her a dime for the 15 seconds I spent.

[Abby Normal]

It's always the software companies that delay these things, but in this case I'm with them. I'm also betting they're hoping the new W4 gets scrapped.

If it were up to me, there would only be the Single table and we would keep using allowances for withholding calculations. I'm pretty certain that personal exemptions will be back one day for tax purposes. They're actually not gone, they're just set at zero.

[Medlin Software, Dennis]

Projecting the calculation algorithms to comply with the proposed changes (as well as allowing the existing form) took no more than a few minutes for me.  What took longer was making space, and making readable, the proposed new parameters on pay stubs.

The real push back (I suspect) is caused by the lazy you know what states and tax agencies, who continue to use federal withholding for any part of their own revenue stream calculations.

Employees, under the proposed changes, can do nothing and continue to use any existing w4 they have in place (2018, 2015, etc.)  Any new W4 would have to be the current year (as always).  Employers will be encouraged to get new forms, but do not have to.  Any media report of complication for software developers is simply untrue.

[Lee B]

Apparently a bit of common sense actually prevailed,

"Following feedback from the payroll and tax communities, the Treasury Department and the IRS will incorporate important changes into a new version of the Form W-4, Employee’s Withholding Allowance Certificate, for 2020. The 2019 version of the Form W-4 will be similar to the current 2018 version. A new draft version of the W-4 for 2019 will be available in the coming week."

[SaraEA]

Medlin, what states use federal withholding as part of their own revenue stream calculations?  I know that a lot of states use federal AGI, but withholding?  The old adage that your federal tax rate is "How much money did you make? Send it to us." must have an addendum in these states, "How much did the feds take?  Send us the rest."

[Medlin Software, Dennis]

AL, IA, MO, and OR.  Lower FWH INCREASES their SWH...  Interestingly enough, none of the four, IIRC, make any adjustments should an administration lower FWH.

Since my business is payroll, I do not follow their actual tax returns to see if SWH is calculated accurately to actual liability, but you can be certain those 4 states know what they are doing, and have zero issue taking in more money each payday as FWH brackets change (revenue stream).

It has only been a few years since one state WH calculation was a flat percent of FWH, but they finally had to end that as an option as FWH kept adjusting down...

There is one state which made huge tax base adjustments, adding sales taxes here and there (especially on certain former tax free services(, added higher/nwe sin taxes, lowering others including some big ones beneficial to business owners, but I guarantee you, it was for an overall increase, not a decrease... which the politicians actually acknowledged, which hurt the lower income folks and benefited the upper income folks, with some flash back to trickle down theory.

We all have had to accept government is a business too.  It has to make more money each year to operate, and because of certain workings, will always spend at or just over their budget each year.  Employes of government like regular raises like private sector employees...

[Lee B]

For 2018 Oregon created a supplemental worksheet, OR-WW, to help employees determine whether their state withholding is correct.

For 2019 Oregon will be releasing an Oregon only  W - 4.

[Lee B]

20 hours ago, cbslee said:

"Following feedback from the payroll and tax communities, the Treasury Department and the IRS will incorporate important changes into a new version of the Form W-4, Employee’s Withholding Allowance Certificate, for 2020. "

Clarification:  The changes in the original draft of the 2019 W -4, while delayed by one year, will be implemented in the 2020 W -4. 

[Max W]

6 hours ago, Medlin Software said:

We all have had to accept government is a business too.  It has to make more money each year to operate, and because of certain workings, will always spend at or just over their budget each year.  Employes of government like regular raises like private sector employees...

Medlin, I think you have to speak for yourself.  I certainly do not all agree that gov't (the state) is a business, and I'm sure others will concur.  Of course , the state needs money to operate, but it is the source of that money that it is a major difference.   States do not "always" spend just over , or under their budget every year.  In fact about one third of the states have continually overspent on their budget and have large unfunded pension and health care accounts.   Five states are in deep financial trouble and at least one, Illinois, is on the verge of bankruptcy.   

Federal Government employees not only make more money in four of five categories,  get more benefits, work fewer hours (as do state employees) , get more paid time off and other perks.   It is the gov't employee benefits that are pushing cities and states toward bankruptcy.   The public employees unions in CA have opposed any measure to modify the system and in fact receive TAXPAYER money to fight any changes.     

 

[SaraEA]

But if it weren't for gov't employees, no one would get the day off for President's Day (sometimes both Washington and Lincoln birthdays), Columbus Day, Veterans' Day, and (in DC) Emancipation Day?

[Jack from Ohio]

1 hour ago, SaraEA said:

But if it weren't for gov't employees, no one would get the day off for President's Day (sometimes both Washington and Lincoln birthdays), Columbus Day, Veterans' Day, and (in DC) Emancipation Day?

Give me a real and solid reason that everyone needs all those holidays off with pay?  At my business, and the firm I work for part time, we work on  those days, and only get paid because we work.  Those "white collar" holidays are just perks that one government agency provided for all the other government employees.

[Abby Normal]

<backs slowly out of thread>

[Lee B]

15 hours ago, Jack from Ohio said:

Give me a real and solid reason that everyone needs all those holidays off with pay?  At my business, and the firm I work for part time, we work on  those days, and only get paid because we work.  Those "white collar" holidays are just perks that one government agency provided for all the other government employees.

I did write up work for a small U S Subsidiary of a Swedish Corporation for 4 or 5 years.

The Swedish employees had 36 paid holidays every year. Just let me say they were a well run very profitable company.

It really doesn't matter how many or how few holidays the employees have. What matters is how productive the work force is !

[SaraEA]

Do we even have 36 holidays in the USA?  Well, there are Hallmark holidays of course (grandparent's day, etc), and just this week was national cheeseburger day.